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An intermediary (may be an individual or a firm) in the secondary market who buys and sells securities/shares simultaneously quoting two-way rates. For example, on the over the counter Stock Exchange of India (OTCEI) only ‘market markers’ are allowed to operate. The Discount and Finance House of India (SBI DFHI) is the chief market maker in the ‘money market’ of India.
A market maker plays a very vital role by providing sustainability to liquidity in the secondary market.