CME Group: Dark Order Book
- Thread starter PocketChange
- Start date
"A Mass Quote is a bundle of two-sided,
actionable quotes in one or more options
markets submitted via a single message.
Only designated market makers can
submit Mass Quotes, and they have special
protections that help mitigate their risk in
matched transactions." Globex reference guide.
There is no flash order on CME. Even on stocks, flash orders are nothing like knowing stops are placed in the entire book.
actionable quotes in one or more options
markets submitted via a single message.
Only designated market makers can
submit Mass Quotes, and they have special
protections that help mitigate their risk in
matched transactions." Globex reference guide.
There is no flash order on CME. Even on stocks, flash orders are nothing like knowing stops are placed in the entire book.
The links provided were just an example.. Each instrument has market makers.
There are at least 6 Market Makers for ES Futures and Options: Citadel Derivatives Trading LLC, Chicago Trading Company, Deutsche Bank Securities, Inc., Goldman Sachs, Timber Hill and Wolverine Trading LLC.
Market makers are awarded order flow. Order flow would mean they get first shot at unpublished resting orders.
Im sorry but the last line is just wrong. They are NOT awarded order flow and they do NOT get the first shot at unpublished orders.
There is a common misconception that MM have this inside edge and we are out there picking everyone off. It just not true. I can tell you that competition is VERY fierce among the MM at the merc and there are some very tight markets being made in the options.
As far as the futures are concerned why would the merc need MM for the futures? There is alot of liquidity there already. I know there have beena few deals to try and get a product going but there are no MM participation in the ES futures. At least not merc sponsered or protected.
In the end MM is not a ticket to free money. Not at all. Maybe you are thinking there is just a little bit of a conspiracy? We are out to get you! ha. With all respect. Jim
There is no conspiracy. Everything is very much Publicly Disclosed...
http://www.cmegroup.com/globex/files/SDKFFNymexFutures.pdf
The Lead Market Maker
(LMM) algorithm for NYMEX products on the CME Globex platform allots a total percentage allocation to all participating Market Makers and employs a âround upâ feature to allow Market Makers to participate in trades if they are at the best available prices.
⢠If NYMEX LMMs are at the best price they are allowed to jump the queue and receive a predefined percentage of trade allocations...
This is just the way the game is played and not a dig at Market Makers per se. It would be insane for them to take on the risk without these types of rewards.
The original tone did start out that way and changed over this dialog.
Why did the 'tone change'? I've always thought that trading futures was like being a piece of fodder in a pacman game. They hunt out the resting orders. Absolutely they do, you can see this just by watching something like the YM. I have a decent little breakout and pullback strategy (signals entry automatically and I place order at my discretion), I know that I have to enter several ticks below/ above signal because the stops are there and 'they' will move price in that direction. This shift is pretty consistant and predictable, too predictable.
The tone changed because this game is disclosed. Albeit, you've got to hunt a little but the CME Group clearly states in their Market Maker Program Documentation they will provide a percentage of order flow to market makers, waive their fees and allow them to cut in line...
IMHO, this still smells like unfair competition and arbitrage by way of Inside Information.
But I am sure our competent financial regulators and their sleuthy lawyers would have jumped all over CME Group, Goldman Sachs and others if this was really the case.
Afterall, Madoff was the head of an exchange and they caught him.
I am perplexed and puzzled because I do not see in any of the U.S. Government Required Disclosures anything specifically stating my orders will be transmitted in advance to a privileged group of market makers contracted by the exchange, who may bypass the competitive order queue and take the trade directly for no charge.
Any one else miss seeing this in their disclosure statements?
IMHO, this still smells like unfair competition and arbitrage by way of Inside Information.
But I am sure our competent financial regulators and their sleuthy lawyers would have jumped all over CME Group, Goldman Sachs and others if this was really the case.
Afterall, Madoff was the head of an exchange and they caught him.
I am perplexed and puzzled because I do not see in any of the U.S. Government Required Disclosures anything specifically stating my orders will be transmitted in advance to a privileged group of market makers contracted by the exchange, who may bypass the competitive order queue and take the trade directly for no charge.
Any one else miss seeing this in their disclosure statements?