Market Maker
Market makers are special institutions that trade for a living through the NASDAQ system.
Market makers make their money trading and executing orders for their clients. Market makers must be willing to take orders for certain stocks as specified by NASDAQ. When working a large order for a client, rather than trying to execute the entire order in the market at once, a market maker tries to make use of his experience to control or temporarily move the stock in his desired direction until the order is completed.
A market maker also tries to make money throughout the day by buying and selling stocks; in essence, acting like a day trader. Large, well known market makers are firms like Goldman Sachs and Morgan Stanley. Throughout the history of day trading, there has always been controversy regarding market maker practices and, for that reason, traders have tried to avoid trading against market makers as much as possible, opting for ECN's instead.
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