Option is a new product in the domestic derivatives market. Although the market maker system is not a necessary condition for the listing of options, according to international experience, the introduction of the market maker system is an effective guarantee for the liquidity and price stability of the option market. With the development of simulated trading in commodity options, the market maker system is gradually introduced into the commodity options market. Moreover, the simulated trading of stock options launched by Shanghai Stock Exchange also introduced the market maker system.
The introduction of market maker system into the simulated trading of white sugar options in Zhengzhou Commodity Exchange is considered to be an important driving factor for the huge simulated trading volume of white sugar options. Dashang also introduced the market maker system in the simulated trading of soybean meal options, which played a positive role in narrowing the bid-ask spread, correcting the price deviation and increasing the trading volume of inactive contracts.
According to the design of CICC, market makers are divided into two levels, one is responsible for continuous quotation and accepting inquiry, and the other is only responsible for accepting inquiry.
The stock option market has also introduced the market maker system. In the full simulation trading of individual stock options, Shanghai Stock Exchange adopts a mixed trading system with competitive market makers under the bidding trading system. On the basis of bidding transactions, market makers need to provide bilateral continuous quotations for options listed on the Shanghai Stock Exchange as required, or provide responses to investors' inquiries. The market makers of options business in Shanghai Stock Exchange are also divided into two levels, one is the main market maker and the other is the general market maker. The main market maker undertakes bilateral continuous quotation, response quotation and other obligations stipulated by the Shanghai Stock Exchange, while the general market maker undertakes response quotation and other obligations stipulated by the Shanghai Stock Exchange.
The option market maker system allows the bidding system and the market maker system to coexist, preventing market makers from gaining monopoly advantage, narrowing the transaction spread and reducing the transaction cost of investors.