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What is a liquidity provider?

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A liquidity provider is an individual or institution that helps facilitate trading in financial markets by providing assets that can be quickly bought or sold. They contribute to market liquidity by offering bid and ask prices for financial instruments, thereby narrowing the spread and enabling smoother transactions for traders.
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A liquidity provider is an individual or institution that plays a key role in financial markets by providing liquidity, which means they offer assets or securities for purchase or sale at all times. They help ensure that there is enough supply and demand in the market, which in turn helps facilitate trading and price discovery. This helps to make markets more efficient and reduces price volatility.

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