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Market Structure
What Is a Market Maker?
Every time you trade an option instantly, a market maker took the other side. Understanding what they do is understanding why the dealer map exists.
NoVo Options Trading · 2026
Educational only, not tax, legal, or financial advice. Rules vary by broker and situation — verify specifics with your broker or a professional.
A market maker is a firm that continuously quotes both a bid and an offer, providing liquidity and profiting from the spread. Their hedging is what creates the dealer levels traders watch.
What they do
Market makers stand ready to buy at the bid and sell at the offer on thousands of options, so you always have a counterparty for an instant fill. They earn the spread and manage the resulting inventory risk by delta hedging in the underlying. They’re not taking directional bets — they’re providing liquidity and staying neutral.
Why they create the levels
Because market makers must hedge their books, their collective buying and selling around big strikes creates real support and resistance — the dealer levels. Whether that hedging damps or amplifies moves depends on the gamma regime. So market makers are, quite literally, the source of the structure NoVo maps.
Market makers don’t predict — they quote and hedge. But hedging a giant book is itself a huge flow, and that flow is the dealer map.
What it means for a scalper
Understanding market makers reframes trading: you’re reading the mechanical footprint of firms staying neutral, not guessing at opinions. That’s the honest basis of structure-based trading. The specialized version on the NYSE is the designated market maker.
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NoVo is a software tool for market analysis and for executing trades you initiate, not financial advice. This article is general education, not investment advice. Options trading involves substantial risk of loss, up to and including your entire capital. NoVo makes no guarantee of profit, win rate, or performance, and past results do not predict future outcomes. You are responsible for your own broker account, configuration, and trading decisions.