In their unusual move to reduce the fees, Euronext raised the stakes. The trading in options and futures on the midcap AMX index needs to flourish. Market makers can trade for free. Their commitment may be the bottleneck.
For a liquid options market, there needs to be a good market in the futures. This future market in the AMX index will open monday. It remains to be seen wether or not any contracts will trade, as there’s only one market maker ready to quote the futures. All Options, usually available to help Euronext in illiquid derivatives, didn’t return the calls.
Only IMC signed for quoting the futures. The firm who recently acquired a stake in TOM, will probably be asked to quote tight the first days. Because the coming week the option market makers will have to decide to take on the quoting obligations. Without market makers, no market will take off.
The main contender as an exchange in the cash market, BATS, went public today. The owner of Chi-X had a bad day. A computer glitch at their own exchange blocked BATS’ own IPO.