Deciphr Academy
Module 19 · Flashcards

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

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