​​​​​MARKET MAKING​

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​​Market Makers play a critical role in contributing to the market quality of The Nigerian Stock Exchange (NSE) by providing improved liquidity and price efficiency, enabling investors to trade in a timely manner. A Market Maker is any Dealing Member of the NSE who has, after being appointed to do so by the Exchange, undertaken to enhance the market liquidity of a particular security in accordance with NSE rules. The primary role of a Market Maker is to maintain a fair and orderly market in its particular securities of responsibility and, in general, to contribute positively to the operation of the overall market by ensuring that buyers and sellers of securities can transact.

Market Making involves the act of entering bid and offer prices in the automated trading system for a specified security (a security specified by the NSE as available for market making) under the conditions stipulated by the NSE.  Market makers profit by charging higher offer prices than bid prices. The difference is called the ‘spread’.

Types of NSE Market Makers
  • Primary Ma​rket MakerAny Market Maker who has been appointed by the NSE as the foremost liquidity provider for a particular security and who has undertake​n to assume the role.
  • Supplemental Market MakerIs a Market Maker appointed to act as a supplementary liquidity provider. as a supplementary liquidity provider.
​For NSE Market Making programme guidelines, please see chapter eight of the NSE RULEBOOK​