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How Does Low Latency Benefit an Options Market Maker?

Low latency, meaning minimal delay in receiving market data and executing trades, is a critical benefit for an options market maker. It allows them to quickly update their quotes, manage their inventory, and execute arbitrage opportunities before competitors.

This speed is essential for maintaining tight bid-ask spreads while effectively managing the delta and gamma risk of their options book, ultimately maximizing profitability and providing liquidity.

What Is a ‘Delta Hedge’ and Why Is It Important for Market Makers?
What Is Gamma and Why Is It Important for Managing a Delta-Hedged Portfolio?
How Do Market Makers Manage the Combined Risk of High Gamma and High Theta?
How Do Options Traders Use the “Greeks” (E.g. Delta, Gamma, Vega) to Manage Risk in Volatile Crypto Markets?