You seem to be confusing a few different things here. One of the fundamental purpose of a market maker is ensuring that both the supply and demand sides are ca

You seem to be confusing a few different things here. One of the fundamental purpose of a market maker is ensuring that both the supply and demand sides are capable of transacting when they want to, even if the supply and demand side don't necessarily want to trade at the same time. So say the farmer only wants to sell bananas on a Monday and you only want to buy them on Thursday, so you can never do the transaction. So your grocer by buying the bananas when they're available and selling to them when you want them is in fact taking on some of the role of a market maker. The reason that bananas don't need high-speed market making however is that the underlying supply and demand for bananas is pretty stable (I'm just guessing here; I don't know anything about the banana market). With currencies the supply and demand is in constant shift, everything from news events to someone making an online purchase in a foreign currency contributes to the shift. So a large part of the premium you pay for currencies is to manage that risk of the underlying supply/demand shifting. So by reducing that risk you can have lower premiums. Say your grocer bought their bananas at $1 and was selling them at $1.50, what percentage of that 50 cents do you think goes towards managing the risk that the demand for bananas will collapse and the bananas might not be worth $1 any more ? - I'm guessing none of it because the bananas will likely spoil before the price of bananas shifts that much. Hence reducing that risk is pointless in the banana market. HTH