A share can be bought or sold at almost any moment during trading hours because firms stand ready to take the other side. That readiness is a business with a specific revenue source and a specific risk.
What a two-sided quote commits to
A market maker posts a price at which it will buy and a higher price at which it will sell, in a stated size, and is obliged to honour both.
This means it cannot decline to trade because it dislikes the direction. It takes whichever side the incoming order requires.
Providing that certainty is the service. Without it, a seller would have to wait for a buyer to appear with matching size and timing.
The spread is the compensation
The difference between the buying and selling prices is the market maker's gross revenue, earned on each round trip through its book.
Individual spreads are tiny, so the model depends on volume. Thousands of small captures accumulate into a margin that covers the risk taken.
Spreads widen where volume is thin, because fewer trades must cover the same risk, which is why less liquid shares cost more to trade in both directions.
Inventory is the risk being managed
Buying from sellers leaves the firm holding stock it did not choose. If the price falls before that position is offset, the loss can exceed many spreads.
Quotes are therefore skewed to encourage the trades that reduce the position, moving both prices down slightly when the firm is holding too much.
Positions are hedged where possible using related instruments, which converts an exposure to a specific share into a smaller exposure to relative movement.
Informed order flow is the harder problem
Some incoming orders come from participants who know something the market maker does not, and trading against them is systematically unprofitable.
Because the firm cannot tell which orders those are in advance, it widens spreads to cover the average cost of being on the wrong side of informed trades.
This is why spreads widen sharply before announcements and during uncertainty, when the probability of facing better-informed counterparties rises.
Why quotes disappear in stress
Obligations to quote generally specify a size and a maximum spread, not a promise to absorb unlimited volume at stable prices.
When prices move violently, firms quote the minimum required at the widest permitted spread, which is technically continuous provision and functionally very little.
Liquidity therefore has a habit of being most abundant when it is least needed, which is a structural feature of the arrangement rather than a failure of any participant.