Hello. A market maker trades against their clients. when the client wins the market maker loses. and vica versa. That is why marketmaker bares risks. Because he is a counterparty. This risk may lead to bankruptcy of a marketmaker, and possible that it will not be able to return funds to their clients. (sorry if i understand anything incorrect). And what about STP and ECN brokers? If the broker is STP or the ECN, they are not client's counterparty, they route the orders to the bank (or match with other clients(ecn)). And they do not bare risks, they are just middlemen. If i understand it right, there are less chances that ECN and STP brokers face bankruptcy as they are middleman but not the counterparty.