<p><strong>Market Maker Stock</strong> refers to a firm that provides <a href="/NewSite/encyclopedia/liquidity/" class="ency-link">liquidity</a> in the stock market by continuously quoting both a buy and a sell price in a financial instrument, such as a stock. These firms are obligated to buy or sell the instrument at any time, even when there are no other buyers or sellers.</p>
<p>Market makers play a crucial role in maintaining market liquidity and stability. They help to ensure that there's always a buyer for every seller and vice versa, which can prevent dramatic price swings. For instance, during the 2008 financial crisis, many market makers reduced their activities, contributing to increased market volatility.</p>