Market Makers
Read frequently asked questions related to market maker quoting obligations, including differences between trading sessions, handling of volatility, and the role of Trading Permit Holders.
Will market maker obligations be the same for RTH and the new GTH session? If not, how will they differ?
Cboe intends for similar market maker requirements to apply across all trading sessions.
If volume is reduced and spreads are wider during the new GTH session, how will this affect market maker quoting obligations?
Market maker continuous quoting obligations across all sessions will include a provision to allow quoting as wide as the underlying for ITM series.
Will market maker quoting obligations remain the same during periods of heightened volatility? For example, today there is no codified requirement to say what quotes should be,rather a best practice framework – will this remain the same?
Cboe plans to add maximum market maker quote width requirements to its rules, with expected implementation sometime after the initial SSO GTH implementation, date TBD. On volatile days,the Exchange may grant maximum quote width relief. The Exchange may also grant relief with respect to opening collar widths.
How will Cboe handle trading in the designated equity options during the new GTH and Curb sessions to account for potential surges in volume based on news events or key economic announcements(jobs reports, inflation data)?
Cboe systems and market makers have proven more than adequate to accommodate high-volatility and high-volume trading. The Exchange also has various systematic mechanisms to protect market makers and other market participants. Additionally, market orders will not be actionable during the GTH or Curb sessions, as is the case with the existing GTH session for select Cboe proprietary index classes.
Can Trading Permit Holders (TPH) choose to act as market makers during the RTH session but not during GTH sessions?
Yes. However, it is anticipated that Cboe will have a GTH Designated Primary Market Maker (DPM) for each class that trades during GTH. This DPM may differ from the RTH DPM in cases where the RTH DPM declines the role during GTH.