According to the competitive characteristics, there are two types of market maker system: monopoly market maker system and competitive market maker system.
Monopoly market maker system, that is, there is only one market maker for each security, and the typical representative of this system is new york Stock Exchange. Monopoly market makers are the only traders who offer bilateral quotations for each security and enjoy corresponding rights. They must have strong comprehensive information ability, be able to accurately predict market trends, and usually get high profits because of their monopoly position. The advantage of this type is clear responsibility, which is convenient for the supervision and assessment of the exchange, but the disadvantage is poor price competition; Competitive market maker system, also known as diversified market maker system. That is, each security has multiple market makers, allowing market makers to enter and exit freely to a certain extent. The typical representative of this system is the "Nasdaq system" in the United States. Since 1980, the average number of market makers per unit of securities in this market is not less than 7. The latest data shows that each security has 65,438+00 market makers, and some actively traded stocks need 40 or more market makers. The advantage of the multi-market maker system is to reduce the bid-ask spread and transaction cost through the competition among market makers, and also make the price positioning more accurate. On the premise of relatively stable prices, competition will also make the market more active and increase the trading volume. However, because there are dozens of market makers in each security, the information possessed by each market maker is relatively scattered, which reduces the accuracy of market forecasting, trading profits and the ability of market makers to take risks.
According to the different contents of rights and obligations, some exchanges divide market makers into designated market makers and general market makers. For example, among CBOE members, there are 349 general market makers 1 177 and designated market makers. Generally, market makers are individuals or companies, registered in the exchange, only self-employed, unable to act as agents, and have no priority. The designated market makers are all members of the Exchange. As a market maker of some securities, it can be self-operated or an agent, and it can also manage the quotation of designated securities. In stock, index and interest rate options, except SPX(S & amp； P500 index) and OEX (s&; P 100 index), the designated market makers have 30% priority.