💧What is the market maker program?
Last updated
Last updated
Kalshi's market operates with the valuable support of a designated group of market makers. This program is highly selective and requires participants to meet stringent criteria.
To be considered, applicants undergo a thorough review process evaluating their financial resources, relevant experience, and overall business reputation. Only those demonstrating exceptional qualifications are granted market maker status.
Market makers play a vital role in ensuring market fairness and orderliness. This program offers them unique benefits in exchange for their commitment to upholding these principles. There are perks to being a market maker including but not limited to financial benefits, reduced fees, differing position limits, and enhanced access. In return, you'll need to agree to some things, like always trying to keep our markets fair and orderly. Some special position limits apply to market makers, but that's to make sure everything runs smoothly.
Imagine a marketplace without market makers. You might want to sell a rare comic book, but there are no interested buyers at your asking price. Conversely, you might be eager to buy a specific antique chair, but no sellers are listing one. Market makers bridge this gap by continuously quoting buy and sell prices, willing to act as either buyer or seller to facilitate trades.
Market makers play a crucial role in the smooth operation of financial markets, particularly in maintaining order books that list buy and sell orders for shares of publicly traded companies. Their primary function is to ensure liquidity in the market, which means that they make it easier for investors to buy or sell shares quickly, without having to wait for a matching buy or sell order to appear. This is done by the market maker acting as the counterparty to trades, thereby guaranteeing that there is almost always someone on the other side of your transaction.
When traveling abroad and you find yourself needing to exchange your native currency for the local one, you're engaging with a critical player in the financial market known as a market maker. A market maker is an individual or institution that quotes both a buy and a sell price in a financial instrument or commodity held in inventory, hoping to make a profit on the bid-offer spread or turn. In the context of currency exchange, these entities take on the crucial role of setting the exchange rates—determining the price at which they're willing to buy and sell currencies—and facilitating transactions between parties.
The price of oil, wheat, or gold is influenced by market makers who buy and sell contracts based on future expectations, creating a liquid market for these essential commodities. The price changes in commodities like oil, wheat, or gold, influenced by market makers' buying and selling decisions, not only affect investors but also have a direct impact on everyday consumer prices, making it relevant to all.
By providing constant liquidity, market makers benefit both buyers and sellers. Buyers can find a seller for their desired asset at a transparent price. Sellers can offload their assets quickly without waiting for a matching buyer. Market makers help prevent price swings by absorbing temporary imbalances in supply and demand.
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