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Quantitative Finance · Glossary

What is Options market maker and quoting obligation?

Also known as: options market maker · quoting obligation

Definition 24.1 Markets I: The Ecosystem and Exchange-Traded Markets · Chapter 24 — Options Market Structure

An options market maker is a firm registered with an exchange to quote options classes. It accepts a quoting obligation, typically to quote two sides in a set percentage of the series of its classes, for a set percentage of the trading day, within a maximum width, and receives privileges in return: lower fees, allocation entitlements, the right to send quotes in bulk.

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