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Traders Glossary

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Market Maker

A firm that maintains a firm bid and offer a price in a given security by standing ready to buy or sell at publicly-quoted prices. The NASDAQ Stock Market is decentralized network of competitive Market Makers. Market Makers process orders for their own customers and for other FINRA broker/dealers; all FINRA securities are traded through Market Maker firms. Market Makers also will buy securities from issuers for resale to customers or other broker/dealers. About 10 percent of FINRA firms are Market Makers; a broker/dealer may become a Market Maker if the firm meets capitalization standards set down by FINRA.

Market Maker Spread

The difference between the price at which a Market Maker is willing to buy a security and the price at which the firm is willing to see it. (See inside market).

MIT, 'Market If Touched'

Frequently used in the commodity futures pits. I seem to recall it being available on exchange-traded stocks as well, but I've never been such a hotshot as to use the designation *as such*. Instead, when I see serious overhead resistance at some point and have sufficient reason to want to unwind my position, I'll respond with a limit order below the resistance to close out my position. Similarly, when I see serious support and want to get into a position, I'll respond with a limit order above the support to gain entry. What I don't want to be doing is chasing the stock wildly (what market orders tend to do) just because some specific price got touched.

MKT, 'At The Market'

It doesn't matter how much you have to pay to buy nor how little you get on a sale, just do it now.

*The term Direct Access refers to the client’s ability to determine which Exchange, ECN or Market Maker receives their order. The term does not mean to imply that you can trade without a broker, as any transaction would require a relationship with a registered Broker-Dealer.

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