Day Trading Market
Market makers are the
bigger participants that 'make a market' day trading in various
defined stocks or other securities. Your day trading broker may
actually be a market maker. Market makers, like big banks and financial
institutions, make money day trading both for clients, and for their
own accounts (i.e. day trading on a very large scale).
Market makers generally
have a fixed contractual obligation to provide liquidity for the
stocks they make a market in - this is essential to enable the market
to run smoothly, and means that a market maker HAS TO GIVE YOU A
PRICE. You may not, of course, like the price he gives you! Market
makers can deal with incredibly large buy and sell orders, although
they will always try to introduce these giant orders into the market
in a 'drip feed' fashion so as not to 'tip their hand' to the other
players in the market.
The big, rich and well
known firms of Bear Stearns and JP Morgan are excellent examples
of day trading market makers. You would be wise to avoid day trading
in the opposite direction to the market maker in their own contractual
stocks, because when they trade, they trade!