Market-Making Law and Legal Definition
Market-making refers to a practice of establishing prices for over the counter securities. Market-making also involves reporting of bid-and-asked quotations. Under this practice, a broker dealer buys and sells securities as a principal for his/her own account. A broker dealer thus accepts two way bids which includes both buying and selling. Hence, a market-making is one form of options trading. It also involves buying and selling of option contracts, or issues, in the stocks of particular companies.[MJT Sec., LLC v. Toronto-Dominion Bank, 2007 U.S. Dist. LEXIS 43165 (N.D. Cal. June 14, 2007)]
