Liquidity Provider
/ˈlɪkwɪdəti prəˌvaɪdər/
Definitions
- (n.) An entity or individual that supplies capital by purchasing securities or assets to facilitate market liquidity, especially in financial markets and trading contexts.
Market makers act as liquidity providers to ensure smooth trading and reduce price volatility.
Forms
- liquidity provider
- liquidity providers
Related terms
See also
Commentary
In legal and regulatory drafting, clearly define the role and obligations of liquidity providers to distinguish them from other market participants.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.