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Market makers are financial institutions or individuals that actively buy and sell securities in a specific market, such as the New York Stock Exchange (NYSE), in order to facilitate trading and help provide liquidity to the market.

Market makers are typically required to maintain a certain level of liquidity, which means they must be willing to buy or sell a certain number of shares of a security at any given time. They do this by continuously quoting both bid and ask prices for securities, which allows buyers and sellers to find each other and trade.

Market makers play an important role in the functioning of financial markets by helping to ensure that there is always a buyer or seller available for a security, even when there is limited interest in it. This helps to reduce volatility and encourage more efficient price discovery.

Market makers also help to smooth out price discrepancies between different exchanges, as they can buy and sell securities on multiple exchanges in order to ensure that prices remain relatively consistent across different markets.
If a market maker goes bankrupt, it can have significant implications for the financial markets and the securities it was responsible for making markets in.