Market Makers
How do market makers earn their profit?
Market makers profit from the bid-ask spread - buying at the bid price and selling at the higher ask price. They do not charge commissions (that's how brokers earn money). While some exchanges offer rebates for providing
Complete Analysis & Legal Rationale
Market makers profit from the bid-ask spread - buying at the bid price and selling at the higher ask price. They do not charge commissions (that's how brokers earn money). While some exchanges offer rebates for providing liquidity, the primary profit source is the spread.
Distractor Autopsy (Why Other Options Are Traps)
FINRA exam writers design incorrect distractors using specific calculation mistakes and regulatory misconceptions. Review why each option succeeds or fails:
Does not match the governing concept in the explanation.
Matches the verified teaching point in the explanation.
Does not match the governing concept in the explanation.
Does not match the governing concept in the explanation.
Official Standard: Governs options accounts, approvals, and related supervisory requirements (verify current text).
Official Standard: Outline-level citation pending rule-specific upgrade. Verify against current FINRA materials.