https://arxiv.org/pdf/1105.3115.pdf

Nevertheless,

most of all trading mechanisms on electronic markets rely on market participants

sending orders to a “queuing system” where their open interests are

consolidated as “liquidity provision” or form transactions [1]. The efficiency

of such a process relies on an adequate timing between buyers and sellers, to

avoid too many non-informative oscillations of the transaction price (for more

details and modeling, see for example [20]).

In practice, it is possible to provide liquidity to an impatient buyer (respectively

seller) and maintain an inventory until the arrival of the next impatient

seller (respectively buyer). Market participants focused on this kind of

liquidity-providing activity are called “market makers”. On one hand they are

buying at the bid price and selling at the ask price they choose, making money

out of this “bid-ask spread”. On the other hand, their inventory is exposed to

price fluctuations mainly driven by the volatility of the market (see [2,5,10,

11,18,24])

(http://www.autoadmit.com/thread.php?thread_id=3862509&forum_id=2#35175057)