SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Technology Stocks : How high will Microsoft fly?
MSFT 483.03+0.5%Dec 5 3:59 PM EST
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: t2 who wrote (28995)9/1/1999 11:39:00 PM
From: taxman  Read Replies (1) of 74651
 
"how the options exchanges work"

from the cboe.

'The market-maker system of trading is another innovation pioneered by CBOE. Competition is the essence of the market-maker system that allows market-makers, floor brokers and order book officials (OBO) to facilitate the execution of customer orders. Marker-makers, floor brokers and order book officials have distinct roles in assuring that customer orders are executed. Market-makers are entrepreneurs who risk their own capital in order to compete with other market-makers for options orders. Floor brokers, on the other hand, are agents who execute orders only on behalf of public customers and firms. Order book officials are salaried CBOE employees who maintain the public customer limit order book, and have no personal financial interest in any trades that occur. CBOE's competitive spirit and the separation of floor functions makes CBOE the marketplace of choice for the overwhelming share of U.S. equity and index options trading.'

if you and i are market makers in say ge, wouldn't we be better off if we didn't compete so hard and just split the market orders coming in from the floor broker? for example if i quote a ge 120 call at 1.25 bid 1.5 asked and floor broker wants 50 calls for his client at market, we each sell him 25 at 1.5. this is better for you than lowering your asking price to 1.375.

now with competition from amex it's different story.

the days of easy money for market makers in dell, msft and others look to be over.

regards

Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News