How Does a “Market Maker” Profit from the Bid-Ask Spread?

A market maker profits by simultaneously quoting both a bid (buy) price and an ask (sell) price for an asset. They aim to buy at the lower bid price and immediately sell at the higher ask price.

The difference between the two prices, the bid-ask spread, is their profit margin. They profit by providing liquidity and capturing the spread on high-volume transactions.