Sales & Buyers
Market makers are intermediaries in the buying and selling of shares, facilitating trade and providing liquidity in the market. The amount by which they are prepared to buy a security and then sell it is called market spread. They are necessary because buyers and sellers are not often in the market place at the same time. They study the market and predict the best time to buy or sell stock. Their main duty is to represent their clients' interests both in buying and selling and receive a commission from each trade. There are stringent rules around this process and they have to give the best possible bid and ask price for each transaction.
A market maker can work for an organisation or can work independently though this tends to be people who have worked in the field for a considerable amount of time. They are in competition with other market makers in the Stock Exchange Trading System.
Besides working in shares, they can work in foreign exchange and most foreign exchange companies employ market makers who buy and sell currency. Increasingly, these jobs are web based.
- Scout new clients and customers and advise them on when and where to trade.
- Meet with clients and other dealers.
- Design and tailor financial products.
- Consult and solve payment issues.
- Track and follow trades from open to close.
- Research the market to identify key trends by reading information from market analysts and databases.
- Work on the telephone and look at information on computer screens and make quick decisions.
- Maintain a number of databases, the work is increasingly electronic.
- Maintain good relationships with market participants.
- Can be known as flow traders, stocks and shares dealer and trader- financial markets.
- The work is predominantly office based though you could meet with clients in the UK or around the world - particularly in financial centres such as London, New York or Frankfurt.
- Market makers can make or lose a lot of money in a few minutes as the markets change all the time and the volatility of the job means that most people do not do the job for long periods of time.
- Hours are usually 7am when the markets open until 5pm.
- Salaries are usually increased performance related pay or bonuses. Companies usually provide benefits such as pensions, gym memberships, private health care and life cover.
- Promotion can be through moving into management or through moving to other, sometimes larger companies.
Personal Qualities and Skills
Key skills for market makers
You will need to:
- Have excellent decision-making abilities
- Have number and IT skills
- Take the Initiative and be able to work autonomously
- Communicate information quickly and accurately
- Be good at keeping deadlines
- Enjoy working in a pressurised environment.
- Swiftly evaluate large qualities of information and disseminate this to others.
- Have good negotiation skills
- Enjoy a sense of competitiveness
- Be resilient and money motivated.
- Be organised and have attention to detail.
Pay And Opportunities
Typical employers of market makers
- Investment companies
- In the UK are mainly in London or other financial centres around the world.
- Jobs are advertised in newspapers, online job sites and individual employers' websites.
Qualifications and training required
Graduates gaining a 2:1 are employed by the larger companies who are members of the London Stock Exchange, although degree subject is often not important though common degrees are business and economics. Some have postgraduate qualifications too.
Market makers have often previously worked in investments, banking, insurance, stockbroking or as accountants.
Interest in money markets, the ability to learn quickly and resilience are as important as qualifications.
Much training is on the job. To be able to give advice market makers must pass qualifications endorsed by the FCA – Financial Conduct Authority and there is more information on their website. The Chartered Institute for Securities and Investment (CISI) provides some training.