Market Maker

A trader can contact a market maker to ask for a two-way quote for a particular currency. Until the mid-1980s, the contact was almost always by telephone over dedicated lines connecting the major institutions with each other or by telex.
But electronic dealing systems are now commonly used computers through which traders can communicate with each other, on a bilateral, or one-to-one basis, on screens, and make and record any deals that may be agreed upon.
These electronic dealing systems now account for a very large portion of the direct dealing among dealers.

As an example of direct dealing, if trader Mike were asking market maker Hans to give quotes for buying and selling $10 million for Swiss francs, Mike could contact Hans by electronic dealing system or by telephone and ask rates on “spot dollar-swissie on ten dollars.” Hans might respond that “dollar-swissie is 1.4585-90;”or maybe “85-90 on 5,”but more likely, just “85-90,” if it can be assumed that the “big figure” (that is, 1.45) is understood and taken for granted. In any case, it means that Hans is willing to buy $10 million at the rate of CHF 1.4585 per dollar, and sell $10 million at the rate of CHF 1.4590 per dollar.
Hans will provide his quotes within a few seconds and Mike will respond within a few seconds. In a fast-moving market, unless he responds promptly in a matter of seconds the market maker cannot be held to the quote he has presented.
Also, the market maker can change or withdraw his quote at any time, provided he says “change” or “off ” before his quote has been accepted by the counterparty.