Is there Market Maker for eminis?

[archer001]

I am wondering whether market maker, or specialist exists for the E-mini S&P 500 futures.

Soppose the following case: ask/bid is 1372.50/1372.25, and there are 5 orders on each side of the ask and bid. Then comes 5 buying market orders and 5 selling market orders. What happens then? which one of the following is true:

a) will the 5 pairs of market orders be matched, thus still leaving 5 buy and 5 sells on the ask and bid level, and the market maker earns a profit of 1.25point.

b) match the market buying order with the limit orders at the ask level, and match the market selling orders with the limit orders at the bid level, thus there is 0 orders remains at the ask and bid level, and no one makes a profit from the ask-bid spread.

BTW, if any one could provide me the detail of the globex trading system, I will be very gratefull! Thank you!

 

[Free Thinker]

Quote from archer001:

I am wondering whether market maker, or specialist exists for the E-mini S&P 500 futures.

Soppose the following case: ask/bid is 1372.50/1372.25, and there are 5 orders on each side of the ask and bid. Then comes 5 buying market orders and 5 selling market orders. What happens then? which one of the following is true:

a) will the 5 pairs of market orders be matched, thus still leaving 5 buy and 5 sells on the ask and bid level, and the market maker earns a profit of 1.25point.

b) match the market buying order with the limit orders at the ask level, and match the market selling orders with the limit orders at the bid level, thus there is 0 orders remains at the ask and bid level, and no one makes a profit from the ask-bid spread.

BTW, if any one could provide me the detail of the globex trading system, I will be very gratefull! Thank you!

there is no market maker. the orders match electronically.

 

[archer001]

Then how about the scenarios in my question? how the orders will be matched?

From this link: http://www.cme.com/trading/get/abt/fifoalgo17329.html
I know that CME uses FIFO algorithm for the eminis. But I am still unclear about the result of my question.

Thank you!

Quote from vhehn:

there is no market maker. the orders match electronically.

 

[Free Thinker]

Quote from archer001:

Then how about the scenarios in my question? how the orders will be matched?

From this link: http://www.cme.com/trading/get/abt/fifoalgo17329.html
I know that CME uses FIFO algorithm for the eminis. But I am still unclear about the result of my question.

Thank you!

computers.

 

[archer001]

I know it is computers, but I want to know it is a) or b) that will happen in my supposed scenarios

Quote from vhehn:

computers.

 

[pjbreen]

b.

 

[John47]

equities are FIFO, thats the answer. If your asking what happens if some orders simultaneously hit the market, I'm sure there's some algorithm for that or else somebody just gets a fill first. Its not really much worth questioning, unless you think that orders coming in at precisely the same moment is an edge worth explointing (its not). Resting order with the best timestamp gets the fill, thats the important part.

But any, the resting bid/offer would get filled because of the timestamp.

You wanna have some real fun do some reading on the matching algorithm for how orders are filled in the Eurodollars.

 

[ntk]

Quote from archer001:

I am wondering whether market maker, or specialist exists for the E-mini S&P 500 futures.

suppose the following case: ask/bid is 1372.50/1372.25, and there are 5 orders on each side of the ask and bid. Then comes 5 buying market orders and 5 selling market orders. What happens then? which one of the following is true:

a) will the 5 pairs of market orders be matched, thus still leaving 5 buy and 5 sells on the ask and bid level, and the market maker earns a profit of 1.25point.

b) match the market buying order with the limit orders at the ask level, and match the market selling orders with the limit orders at the bid level, thus there is 0 orders remains at the ask and bid level, and no one makes a profit from the ask-bid spread.

BTW, if any one could provide me the detail of the globex trading system, I will be very gratefull! Thank you!

Not sure I understand, but i'll give it a shot:

-all orders on globex are electronic and are given priority by time

Let's suppose in your example above that I am the person offering 5 contracts at 72.50 and I am also the person bidding 5 contracts at 72.25. Let's also suppose that nobody else is bidding or offering at these levels, as per your example. Now, suppose you come in and place a market buy for 5 contracts- you will be long @ 72.50 and I'll be short at the same price. Now suppose that 1 millisecond later, someone else sells 5 contracts at market. Assuming that I still have the best bid at 72.25 (since it has only been a millisecond) then that person will be short at 72.25 and I will be out of my short having profited a tick. Thus, to answer your question- scenario b would be the case, except that it is possible that someone profits from the spread (that being me in this example

 

[archer001]

Thanks a lot! I guess this is a kind of scalping, am I right?

Also I come to another possibility: if the ask/bid price is 72.50/72.25, if I want to buy 1 contract, then I have 2 options:

a. place a market buy order, which will eat the first order in the ask queue with, the real price will be 72.50.

b. place a limit buy order at 72.50. If the order is executed, I get a better price 72.25, with a potential risk of not being able to be executed when the price moves higher.

Quote from ntk:

Not sure I understand, but i'll give it a shot:

 

[ntk]

Quote from archer001:



b. place a limit buy order at 72.50. If the order is executed, I get a better price 72.25, with a potential risk of not being able to be executed when the price moves higher.

This is incorrect. If the price is .25 by .5 and you put a limit buy order at .5 then you WILL NOT get a better price than .5 (although you won't pay any more either).

sorry that I didn't see this question earlier.