Market-Making in Options

Market Makers for option contracts are authorized to enter quotes in all option contracts and may choose between the following three models:

Regular Market-Making (RMM) applies only to less liquid options. The obligations are:

• Response to quote requests in all exercise prices and all expirations
• Products in which participants would like to act as Regular Market Makers can be selected where available

Permanent Market-Making (PMM) is available for all options. The obligations are:

• Continuous quotation for a set of exercise prices for a pre-defined number of expirations
• Products in which participants would like to act as Permanent Market Makers can be selected individually

Advanced Market-Making (AMM) is available for pre-defined packages of equity and/or equity index options as well as options on fixed income futures. The obligations are:

• Continuous quotation for a set of exercise prices for a pre-defined number of expirations and options
• Participants can act as Advanced Market Makers in any package offered by Eurex

Good Quotes

Quotes are double-sided and must have a bid/ask spread equal to or narrower than the maximum quote spread. Quotes entered by Market Makers are binding, and orders can be matched at these prices. All quotes that fulfill the Market-Making obligations have to be entered on the Market-Making accounts (M-accounts). Only trades posted to the M-accounts are eligible for refunds of transaction and clearing fees.

Wide Quotes

Market Maker can also enter quotes with an arbitrary bid/-ask spread that exceed the maximum spread. Wide Quotes will not:

• define a price at which market orders may be matched
• interfere with the protection of market orders
• be considered in Market Maker performance measurement
• flow into the best quote price and quantity calculations in inside market

Quotes that have lost one side via complete matching will also be flagged as "Wide Quotes". That is, a "good quote" may turn "wide" if one side is fully matched.