Great, it’s time for the annual play-off for market maker licenses. The auction for primary market maker (pmm) licenses was held two months ago. The contestants had a month for learning the tricks of the trade. From December 1st they will start for real. Tight markets in scores of option classes. The market maker with the tightest spreads for the biggest size will win the game. Quoting all series until the next auction in November 2012. In my crystal ball I see a different world in the end of 2012. With more attractive flow at TOM, the market maker auction end of 2012 will be different. But not yet.

Configure the trading systems to quote as tight as possible, without giving away too much free cookies. Quoting tight is nice, but serving a free lunch could be a bit costly. There are eleven play offs. More than usual. Euronext decided to do it all in one batch. Here is an overview of the battlefield :

Option Class

Market Makers competing

Aegon (AGN)  IMC, Tibra, Nino
DSM  IMC, Scrocca
ING  IMC, Nino
KPN  Caerus, IMC
Mittal (MT)  Caerus, IMC
Philips (PHI)  Caerus, IMC, 323
Post NL (PNL)  All Options, IMC
Royal Dutch (RD)  Caerus, Tibra
Randstad (RND)  IMC, Scrocca
TNT Express (TNE)  All Options, IMC
Tom Tom (TTM)  All Options, 323
Unilever (UN)  Caerus, IMC

We do miss some usual suspects. Optiver is not in the list. In this case it means they secured their territory properly, and performed well last year. You can stay Primary Market Maker as long as you wish, as long as you fulfill your quoting obligations. IMC apparently did not, they are on the defense against Caerus and in lesser extent Nino, 323 and Scrocca. The final score of the game will be published in February 2012.

The full list of market makers and their roles can still be found here (pdf).

 

Jack
Jack