Market making is an activity whereby a trader simultaneously provides liquidity to both buyers and sellers in a financial market. Liquidity is the degree to which an asset can be quickly bought or sold without notably affecting the stability of its price. Market maker “make a market” by quoting prices to both buy and sell an asset. In this way, the market maker (or liquidity provider) acts as both a buyer and seller of last resort where there would not naturally be another buyer or seller, thereby providing liquidity.