Market Makers
The firms quoting both sides all day — paid in spread for providing the liquidity you consume.
Reading the TapeBeginner 3 min read· Lesson 8 of 11 in Stock Market Basics
Their role
Market makers continuously post bids and asks, profiting from the spread while managing inventory risk. They're why you can trade instantly: someone is always on the other side, for a price. In fast markets they widen quotes or step away — spreads blowing out during news is them repricing their risk, not a glitch.
Practical takeaway
You pay the spread to trade NOW. In calm liquid names that toll is tiny; in volatile or thin names it's real money — one more reason limit orders are the default of careful traders.