Market makers: loan or retainer?: key words
Read the word, say the meaning out loud, then open the card.
Market maker
A firm that stands ready to buy and sell at prices it shows to everyone. Source
Bid
The highest price a buyer will pay right now. Source
Ask
The lowest price a seller will accept right now. Source
Spread
The gap between the bid and the ask. Source
Inventory risk
The risk of holding something you can't sell. Source
Call option
The right to buy something at a fixed price in the future. Source
Token loan agreement
A deal where a market maker borrows a project's tokens for a set time, usually paid with call options. Source
Retainer
A deal where the project pays the market maker a fee, usually every month. Source
Wash trading
Trading with yourself, or with a partner, to make it look like real buying and selling is happening. Source
Spoofing
Placing buy or sell orders you plan to cancel before anyone can trade with them. Source
Two-sided quote
Showing a buy price and a sell price at the same time. Source