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In Options Trading, How Does the Role of a Market Maker Compare to a DEX Liquidity Provider?

Options market makers actively quote prices and manage risk (hedging); DEX LPs are passive capital providers who earn fees via the AMM.
Greeks.Live17.11.25

In Options Trading, How Does the Role of a Market Maker Compare to a DEX Liquidity Provider?

An options market maker actively quotes both bid and ask prices for options contracts, using complex models to manage risk (like delta hedging) and profit from the spread. A DEX liquidity provider is a passive participant who deposits assets into a pool and earns fees, with the AMM algorithm managing the pricing.

The options market maker is an active risk manager, while the LP is a passive capital provider.

What Is the Difference between an ‘Active’ and ‘Passive’ Order in the Context of Market Making?
How Does the Capital Efficiency of an LP Influence Their Quoting Aggressiveness?
How Do Automated Market Makers (AMMs) in DeFi Replace Traditional Market Makers?
Is Staking Considered a Passive or Active Investment Strategy?

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