Do market makers manipulate price?
Market Makers make money from buying shares at a lower price to which they sell them. This is the bid/offer spread. The more actively a share is traded the more money a Market Maker makes. It is often felt that the Market Makers manipulate the prices.
Do market makers buy at the bid?
Market makers, who may be either independent or an employee of financial firms, offer to sell securities at a given price (the
Bid and Ask Definition, How Prices Are Determined, and Example
) and will also bid to purchase securities at a given price (the bid price).
Do market makers buy and sell to each other?
Market makers are obligated to sell and buy at the price and size they have quoted. Sometimes a market maker is also a broker, which can create an incentive for a broker to recommend securities for which the firm also makes a market.