Mike | The Lab
Published on
Jun 25, 2025
Someone is filling the order on the other side when you place a trade. Frequently, that is a market maker rather than another retail trader. These players are vital to the efficiency, liquidity, and smooth operation of futures markets.
What precisely is market making, then, and why should traders be concerned?
What Do Market Makers Actually Do?
Both sides of the order book are constantly updated with bid and ask quotes from market makers. Offering liquidity so that traders can enter and exit positions rapidly without significantly affecting the price is their responsibility in order to facilitate trading activity.
They make money from the spread rather than forecasting the direction of the market. They frequently manage millions of microtransactions across several markets as a result, using high-frequency technology.
Why It Matters to You as a Trader
Spreads would expand and slippage would rise in the absence of market makers. This would significantly reduce the efficiency of active trading, particularly scalping and intraday setups.
How market making affects your trading is as follows:
Better entry and exit prices are associated with tighter spreads; higher liquidity makes it simpler to scale in or out of transactions; and lower slippage results in more reliable fills.
Their work can regulate price discovery and avoid excessive gaps, especially during volatile occurrences.
TL;DR
Despite their background operations, market makers are essential to contemporary futures trading. Gaining insight into their function helps you better understand price movements and what's going on behind the candles.
