Electronic Market making
Optiver started in 1986 as a market maker on the Amsterdam-based European Options Exchange (EOE) and today market making is still our core business. Currently we ‘make markets’ on all major exchanges in Europe, the United States and Asia-Pacific.
As a market maker Optiver continuously quotes both bid and ask prices for financial instruments and therewith provides a ‘two-sided market’ in those instruments. Natural buyers and sellers may enter the markets at different times and by stepping in between Optiver allows buyers and sellers to immediately transfer their risk, ensuring liquidity in the market and execution certainty for investors.
As a market maker Optiver usually takes no directional positions in securities. And we aim not to have any positions overnight and try to end the day flat (without any short or long positions).
Today the employment of automated, high speed trading applications is a prerequisite for a market maker to be successful. The use of sophisticated and fast trading applications enables a market maker to trade in higher volumes, with higher speed and tighter spreads. It also facilitates the processing of market data, the timely reaction to changing market conditions and therewith better enables a market maker to manage its risks.