Archive · 16 Aug 2025
Market Makers: Role and Function in the ETF Market
Imagine you want to buy or sell something like an ETF.
Sometimes, it's hard to find someone else ready to trade at the right price.
That's where market makers come in!
They buy and sell ETFs to keep the price close to its real value.
They make a tiny bit of money from each trade, covering their costs.
They help make sure everyone can trade easily, even when there aren't many buyers or sellers around.
Think of them as helpful helpers who keep the market running smoothly.
Market makers ensure smooth ETF transactions on stock exchanges.
They address liquidity issues, especially when trading activity is low.
Market makers earn from spreads, covering costs and profit.
ICICI Prudential Mutual Fund replaced Kotak Securities with Parwati Capital Market.
Regulations require at least two market makers per ETF to ensure liquidity.
- Who
- Market makers like Parwati Capital Market and Kotak Securities.
- What
- Market makers facilitate the trading of Exchange Traded Funds (ETFs).
- When
- The information was published on August 16, 2025.
- Where
- In the stock market, specifically with ETFs.
- Why
- To ensure smooth ETF transactions and address liquidity issues.
- What they do
- Facilitate ETF trading and ensure liquidity
- How they earn
- From spreads in the market
- Example Market Makers
- Parwati Capital Markets, Kotak Securities
- Market Maker's Role
- Bridge the gap between the ETF's traded price and iNAV
- Spread
- Covers STT, other charges, and profit margin