In the past Euronext Liffe used to have an auction in market maker roles every six months. This has been changed, and all roles have been auctioned. This selection process is based on the performance of the market maker in the past year. Quoting tight and for size will earn you brownie points. Generally speaking, the big stocks and the index are always in great demand – and the tiny illiquid option classes are hard to fill with liquidity providers. Compare Royal Dutch Shell with Mediq.
The end of weekly options in Philips and KPN
With the trading fees charged to retail investors it won’t come as a surprise the weekly stock options aren’t popular. The weekly’s in Aegon are still okay with Optiver, IMC and Scrocca signing for the quoting obligations, but ING and Mittal weekly’s are depending on a single market maker (Nino). The weekly options in Philips and KPN will be deserted after November 1st. Guess Euronext will halt trading in these options. Also note the dividend futures failed, the screens are empty.
Scrocca the new liquidity provider king
The graph shows us the amount of primary market maker roles (blue) and competitive market maker roles (red) per firm. The Sloterdijk based firm Scrocca is quoting the most option classes. True believers in the quoting approach, but completely absent in the AEX index options. All Option is still having several roles too, but most of their PMM roles are in quiet illiquid stocks. Note the overview of liquidity provider roles will change in February 2012, after results of play off procedures will be announced. Always good for the competitive spirit, will get back to those matches later.