The game has changed, old tricks don’t work anymore. Not for Euronext Liffe, that is. Steadily introducing new options on stocks may have worked in the past, but is currently facing strong headwinds. Don’t expect much enthusiasm for quoting the new Ziggo options.

Market conditions have seen better days. Currently the number of serious market makers is small. Sure enough, all of them want to quote the major stock options and indices. Royal Dutch, ING, AEX. But spending resources on providing liquidity in Ziggo options is another thing. You don’t get paid to take on this risk.

In other words, it wouldn’t surprise me if the introductions of AMX index options and Ziggo options will fail due to lack of interest of market makers. Today, in the second week IMC had to quote the FMX futures, the market was 12 euro wide. And today was the deadline for the market makers to sign in for quoting AMX options.

Euronext Liffe should try something new. Slash the transaction fees and make sure the retail investors benefit.

Update

As expected, none of the large market makers signed for quoting all series as Primary Market Maker (PMM) in these midcap options. Euronext had to call the regular market maker for help : All Options is going to do it. Good for them, hope it will turn out as a succesful product. IMC will be the competitive market maker. Rest of the market couldn’t see any upside potential and stay on the sideline.

Trading starts thuesday the 10th.

Jack