What Are the Regulatory Requirements for a Market Maker in the US Options Market?
US options market makers must register with the SEC and FINRA, adhere to strict capital requirements, and comply with rules like Reg NMS. They have 'affirmative' obligations to maintain continuous, competitive two-sided quotes and 'negative' obligations not to engage in manipulative practices like front-running or spoofing.
Their activities are subject to intense surveillance.
Glossar
Options Market Makers
Framework ⎊ Within cryptocurrency derivatives, Options Market Makers (OMMs) provide liquidity and price discovery by continuously quoting bid and ask prices for options contracts.
Regulatory Requirements
Framework ⎊ Regulatory requirements within cryptocurrency, options trading, and financial derivatives are increasingly shaped by a global framework emphasizing investor protection, market integrity, and financial stability.
Options Market
Instrument ⎊ The options market facilitates the trading of derivative instruments that grant the holder the right, but not the obligation, to buy or sell an underlying asset at a specified strike price before or on a certain expiration date.
Market Maker
Genesis ⎊ The concept of a market maker within cryptocurrency derivatives, options trading, and broader financial derivatives fundamentally addresses liquidity provision and price discovery.