Market makers on CME

There are no designated market makers for FUTURES. In this regard, ANYONE, whether a customer, a floor broker, or some agent or representative bidding or offering is a market maker. This is the basis of "price discovery". There is no requirement for ANYONE to buy or sell a minimum amount. There is a bid and/or offer.

There are market makers for OPTIONS. The pdf file you link is supporting as well, as it is for the EuroDollar OPTIONS market makers program.

As mentioned, new (futures) products or (futures) products deemed illiquid may have temporary market maker programs, but these are special, most times product launch only situations.
 
How is that different from a 'true' market maker? Someone yells is the pit 'where's the market?' or submits an eRFQ, the 'market maker' responds by telling that trader, and the world, the price levels for which the market maker will buy and or sell that contract. I've stood in the pits and in front of my screen making markets and taking risk in an effort to maintain an orderly market. This has included dealing for my own book as well for customers.

This does not differ from a market maker on NYSE standing at their post and creating a market. How do you define 'Market Maker'?
 
Quote from turdlehead:

There are no designated market makers for FUTURES. In this regard, ANYONE, whether a customer, a floor broker, or some other agent or representative bidding or offering is a market maker.

There are market makers for OPTIONS. The pdf file you link is supporting as well, as it is for the EuroDollar OPTIONS market makers program.

As mentioned, new (futures) products or (futures) products deemed illiquid may have temporary market maker programs, but these are special, most times product launch only situations.
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There is LMM program on corn, soybeans and wheat futures since last summer and those futures are no launching illiquid contracts.
 
Quote from TraDaToR:

There is LMM program on corn, soybeans and wheat futures since last summer and those futures are no launching illiquid contracts.
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This is related to the move to Globex from eCbot. For ags, it is has strong relationship with "implied" pricing, which is option-centric, and therefore melded with Globex price-matching algos for futures. Completely incorrect to consider this to be the same or even similar to an equity market maker.
 
turdlehead,
what do you mean when you state this has alot to do with implied pricing? I agree, the LMM has alot to do with CME inducing market makers to make market in the electronic grains, but how does this relate to implied prices? market makers us the implied market place to cover themselves and hedge (as do many traders), i understand that, but i don't see how this dramatically differs from a market maker on NYSE. you're employed (or induced) by the exchange to make markets. NYSE paper fillers are VERY similar to locals in pits.
 
Quote from covered_call:

turdlehead,
what do you mean when you state this has alot to do with implied pricing? I agree, the LMM has alot to do with CME inducing market makers to make market in the electronic grains, but how does this relate to implied prices? market makers us the implied market place to cover themselves and hedge (as do many traders), i understand that, but i don't see how this dramatically differs from a market maker on NYSE. you're employed (or induced) by the exchange to make markets. NYSE paper fillers are VERY similar to locals in pits.
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From KCBT:
Implied pricing on the CME Globex® platform integrates bids and offers, in spreads and their underlying contracts, to provide the most liquid markets and best possible prices. There are currently two types available, implied "IN" pricing and implied "OUT" pricing.

Now read this:
http://www.cme.com/files/ImpliedPriceOverview.pdf

Now recall, ags are physicals. For every contracted bushel there is in fact a bushel. Applies to whatever measurement unit is used for a given physcial. Forget anything else, that right there puts a LMM in a different breed than equities MM. To drive the point, both options and futures are binding contracts. Equities have no resemblance to a contract, binding or not.

Also note per the linked pdf, LMM is the last man (of 3) on the matching algos priorities totem pole. In equities, a market would not even exist without at least 1 MM, and I seem to recall a minimum of 2 MMs are required for an equity to be listed.

CME LMM is not the same nor even similar to an equity MM.
 
Quote from covered_call:

turdlehead,
what do you mean when you state this has alot to do with implied pricing? I agree, the LMM has alot to do with CME inducing market makers to make market in the electronic grains, but how does this relate to implied prices? market makers us the implied market place to cover themselves and hedge (as do many traders), i understand that, but i don't see how this dramatically differs from a market maker on NYSE. you're employed (or induced) by the exchange to make markets. NYSE paper fillers are VERY similar to locals in pits.
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Covered Call, that was my first thought when I saw this message. But given it's not the first time I hear about options, exotics... gravitating around ags , I didn't mind asking. I don't really see the difference with equity MMs...

For Turtlehead, I f you're implying that MMs are not as favorited as on stocks, I totally agree.
 
Quote from TraDaToR:



For Turtlehead, I f you're implying that MMs are not as favorited as on stocks, I totally agree.
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Firstly, the name is TURDlehead.
Secondly, delude yourself into thinking an LMM is equivalent to an equity MM if you need a scapegoat. Whatever works for ya.

Happy Holidays
 
Quote from turdlehead:

Firstly, the name is TURDlehead.
Secondly, delude yourself into thinking an LMM is equivalent to an equity MM if you need a scapegoat. Whatever works for ya.

Happy Holidays
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Calm down...

I found your post about about option driven ag instrument interesting, sorry if I seemed rude( chrismas day you know ). I already take profits of those fuckers( CME LMMs )
 
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