Market Makers

Owned by CME Group
Apr 26, 2024
2 min read

A market maker is an authorized customer permissioned to quote both the buy and sell side in a given market. The main function of the market maker is to provide liquidity to the marketplace.

CME Group provides Mass Quote functionality to customers to submit bid/ask pairs and generate two-side markets for multiple instruments on CME Globex platform.

Mass Quotes

Authorized CME Globex customers use Mass Quotes functionality to submit bid/ask pairs and generate two-sided markets for multiple instruments for CME Group options.

Mass Quote functionality allows customers to create and maintain a market on a large number of instruments more efficiently by enabling customers to:

  • Create and update their position on up to 15 instruments utilizing a single message.

  • Cancel all active quotes across all instruments, cancel all active quotes within one instrument group, or cancel a list of specific quotes by submitting a single message.

  • Utilize  Mass Quote Protections to eliminate positions upon logout, disconnect, or trading activity exceeding predefined parameters.

The Mass Quote sequence begins with submission of a Mass Quote message from an authorized client system to the CME Globex platform. CME Globex acknowledges the Mass Quote submission with a Quote Acknowledgment message. After the initial Mass Quote is acknowledged by the CME Globex platform, the client system can modify the Mass Quote or cancel the Mass Quote.

CME Globex uses various algorithms including the Lead Market Maker (LMM), FIFO with LMM and FIFO with Top Order and LMM.

Mass Quote Cancel

Mass Quote cancel is accomplished by modifying the price and quantity of a quote to zero (0). Authorized customers may perform the following types of quote cancels:

  • Cancel one side of a resting quote and leave the opposite side unchanged.

  • Cancel one side of a resting quote and modify the opposite side.

  • Cancel both sides of a resting quote.

  • Modify only one side (bid or sell) of a resting quote by using the appropriate bid or offer quantity and price values in a new Mass Quote entry message.

Mass Quote Protections

MQPs provide authorized customers submitting Mass Quotes configurable parameters to control quote exposure.

See the Mass Quote Protections topic for complete details on this functionality.



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