1. Custody risk.

The existence of inventory risk makes inventory management an important daily business component of market makers. One way of managing this is by maintaining an appropriate position in inventory in a continuous flow of buying and selling. The appropriateness of the quantity is determined based on the market maker's risk tolerance and judgment on the security price trend. It is this kind of inventory risk and its management that promotes the enthusiasm of market makers for trading, and also gives the market an inner strength that continues to become stronger. This is also the main reason why market makers will also have a certain impact on market prices in the process of inventory management.

2. Information asymmetry risk.

The risk of information asymmetry faced by market makers is a risk that is difficult to accurately measure. It can often only be measured from subsequent price changes, that is, this cost is equal to the market maker's quotation and the new market price. the difference. In this way, market makers can only reduce the negative impact of asymmetric information trading by expanding their bid-ask quotation differences. However, if the price difference is too large, it will also reduce market liquidity, reduce trading volume, and also reduce market makers' income.

The size of asymmetric information risk is closely related to the maturity of the market, the soundness of the policy, and the self-discipline of traders. In an unsound market in its infancy, if the scope and effectiveness of the policy system are not very strong and market participants have poor self-discipline, this risk will be greater.

Therefore, to fundamentally reduce the overall level of asymmetric information risks, it is necessary to establish a sound and effective information disclosure system. This point should be paid special attention to when implementing the market maker system in the domestic futures market.

The risks that option market making business will face during its development include market risk, liquidity risk, credit risk, operational and system risk, special event risk, etc. Market makers that can survive in the long term do not pursue significant short-term profits, but always adhere to strict risk management.

Market makers have accumulated a large number of positions during the market making process. Without controlling risks, a large price fluctuation can bring fatal losses and erode the accumulated profits in the past. .