Options on Gemalto
While the introduction of options on Twentsche Kabel is still in progress, Euronext announced to introduce a new class of options, on Gemalto. And they are in a hurry. Trading will commence on July 25th, and market makers can apply until July 18th.
Gemalto is the opposite of Twentsche Kabel. Don’t know much about this French firm, apart from the strange fact it’s part of the AEX index. Ticker code on Euronext will be GMT. TOM will probably use another ticker code. Speaking of which – when will TOM take the initiative to introduce new options instead of playing copy cat? Time to grow up.
For TOM, I suggest options on Pharming. Instead of a multiplier of 100, take 1000 or even 10000 stocks as underlying. Start with low fees for retail investors and team up with some market makers to be assured of a liquid market. One more bit of advice, when using twitter : try to be a little faster. I should start a consultancy firm.
Source on Gemalto Options : Euronext notice
Liquidity provider will be 323. They are committed to such tight quotes no other market maker wants to join in. Euronext won’t be happy with this 323 fail.
if the stock doesn’t have gaps or volumes, there is no harm in quoting tight, its not like quoting tight is going to be hugely profitable if there aren’t volumes
what did euronext expect, roaring success of options on a stock nobody has even heard of
There were 4 market makers in the running for PMM in Gemalto:
1. All Options
2. Caerus
3. Scrocca
4. 323 trading
Last one made a mistake by bidding spreads like it would be a 5 euro stock. Gemalto is trading around 75 euro. All Options, Caerus and Scrocca decided to withdraw from the auction after 323 showed their weird bid.
So, there was interest from market makers. Just not at this spread level.
why are you so sure that 323 made a mistake in its spread? have they corrected it since then?
It’s an auction. You can’t change it after submitting.
so they just ended up bidding most aggressive spreads in one time auction, now they would have to quote those spreads necessarily? what happens if they do not, the exchange has a recourse? and isn’t bidding for PM happens through month long quoting rather than one time bidding?
Yes, they have to quote it otherwise they will get a fine.
Play off in quoting is only with existing options, Gemalto is new.
how much is the fine? how much could 323 suffer due to tight quotes, electronic eyes could cause massive damage to their slow updating actual quotes?
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how much is the fine? how much damage fast moving electronic eyes are likely to cause on 323 slow updating actual quotes?