How a market maker works Basically, i understand the purpose of having a market maker is to faciliate a trade. For example, if I want to sell 1000 shares of Disney at $100, there won't always be a buyer on the other side willing to buy it at the exact number of shares and the exact price. This is where market makers come in. They are willing to risk buying my 1000 shares of disney stocks at $100. But they have to be compensated for the risk in holding the 1000 shares of Disney stocks (the stock could go down after MM buys it). The MM is compensated for it by selling the 1000 shares at a price higher than $100, and making money off the spread. For example, after selling it to MM for $100, the MM may set an asking price of $105 for 1000 shares. If someone else buys the stock, the MM makes money off the spread of $5/share. Is the MM's desire to be compensated (by making money off spreads) for the risk he's taking in holding the 1000 shares of Disney stocks one of the reasons markets have an uptrend? Because no MM is stupid enough to sell the 1000 shares at $99, which would cause him to lose $1/share. So since his asking price is always going to be above the price he bought the shares at, as long as someone buys his shares, the price will go up. The way MM leads the direction of a particular stock is that when he has a high % of shares of a particular stock oustanding, traders basically have to adhere to this MM's rules. If the MM wants a particular stock to go up, he will set a higher asking price, and if he wants it to go down, he will set a lower bidding price to buy the stock.