Play-off for market makers
Twice a year Euronext is auctioning licenses for market makers in options. The market makers don’t have to pay for the right to send their quotes, they just have to fulfil their duty. The right to send quotes to the market is granted to the market makers who commit themselves to the tightest bid-ask spreads.
As these ELPS schedules are invariably set at the tightest quote settings, all market makers bid for the same conditions. The good part is that existing market makers never lose their license – as long as they are able maintain good quotes in the market. So no big changes over here. The big three (Optiver, All Options, IMC) will remain the dominant market makers. In a few places a new place for a primary market maker (pmm) will be created.
This is where the fun starts to kick in. For the new places market makers will have to fight for their right to quote. In Philips and SBM Offshore the best of the rest will have to send their tightest quotes for two consecutive months. Points are awarded for market presence, size and the tightest bid-ask spread.
Once the primary market maker license is granted, companies will have to keep on performing well or they may lose it next year. This is what’s treating Curvalue, part of the listed company Van der Moolen. It will have to defend its positions in Unilever and ING against eager beavers 323 Trading and Tibra.
The losers still can trade, though. A competitive market maker (cmm) can still send quotes, just a lot less and with less bandwidth. Because of the standard 5 cent tick size the quoting permissions are important.
The play-offs:
ING
Curvalue plays relegation battle against Tibra Trading.
PHI
Tibra and 323 compete for the new spot
UN
Curvalue plays relegation battle against 323
SBM
All Options and 323 compete for the new spot
Hard to predict who’s going to win. Curvalue seems to be in trouble, 323 is very small, Tibra still unknown and All Options may not be very serious on SBM. Time will tell.
Who can give a shit about these PMMs. Not really worth it anymore.
In static markets it’s an advantage. Profits from the bid/ask spread.
I’d place my bet on Tibra. 323 is sold.
there are CMM which trade more in the screen than a PMM.
Hey guys, what about Tibra in Europe?
Are they aggressive, making a lot of the daily turnover?In Asia, they’re pretty good…
And to the guy who’s selling 323, any particular reasons for that??
thx
IMC is doing fine but firing all the traders?
News is that Tibra is under fire from Optiver .Seems they have legal fights .
Optiver is pissed off and going for the kill .
We’ll see but in Ozziecountry they have problems .
Yeah, former Optiver traders ripped the software and used it at Tibra. Optiver sued them, and won.
Wrong. Optiver only won the right for external experts to inspect the code and decide whether it was ripped or not. The code may look similar because both companies use the same ISV as “front end”
Who wants the PMM anyway? Why would you want to have to quote all those rubbish series? Better to CMM and cherry pick!
Does someone know the results of the license auction?!
You can find the outcome of the auction here (PDF): http://www.euronext.com/fic/000/046/686/466866.pdf
A complete overview of the liquidity providers for each class is found here: http://www.euronext.com/fic/000/049/971/499710.xls
Good luck with it!
Yeah Anonymous on April 16 is wrong, and Anonymous on April 17 is right. Go and read the case in the online law databases for yourself.
Anonymous 16 could find HIMSELF in some legal fights if he continues to make defamatory statements like that.
Former Optiver traders ripped the software and used it at Tibra. Optiver sued them, and won.
Can someone please put the link to the law database to stop the anonymous crap? Thx
http://www.austlii.edu.au/cgi-bin/sinosrch.cgi?method=title&query=optiver&meta=%2Fau&mask_path=au%2Fcases%2Fcth%2FFCA