Market Making at NASDAQ OMX Derivatives Markets

As a member at NasdaqDerivatives Market there is a possibility to become a Market Maker in listed series on all Nordic markets.

The purpose of the Market Maker program is to maintain a high level of order book liquidity in options and futures on Nordic shares and indices.

A Market Maker agrees to provide quotes on its Market Maker account regarding various exchange listed instruments in accordance with an agreement between the member and the exchange (Market Maker Agreement). In exchange the Market Maker receives a number of benefits such as Market Maker fees and multi-quote functionality. 

Market Making Benefits

As a Market Maker at Nasdaq Derivatives Markets the member will receive benefits such as;

  • Market Maker fees for chosen instruments or all instruments on the market where the Market Maker is active – depending on the Market Maker commitment (see Market Maker Types).
  • Instantaneous placement/removal of quotes (two-sided prices) is a function reserved for Market Makers.
  • Market Maker Protection functionality.
  • Possibility to influence. Market Makers at Nasdaq Derivatives Markets play an important role when it comes to discussion and feedback relating to, inter alia, upcoming changes and possible improvements and are thereby given the possibility to influence the market structure.

Market Maker Types

There are two different kinds of Market Makers at Nasdaq Derivatives Markets;

  • Small Market Maker (Regular/Advanced)
  • Large Market Maker (Regular/Advanced)

A small Market Maker undertakes to quote prices in instruments chosen by the Market Maker which gives entitlement to Market Maker fees in relation to the trading of the chosen instruments.

A large Market Maker undertakes to quote prices in a number of instruments chosen by both the Market Maker and the exchange. By fulfilling the obligations a large Market Maker is entitled to Market Maker fees for all instruments on the market where the member is Market Maker.

Advanced/Regular Market Maker: The difference between an Advanced Market Maker and a Regular Market Maker is the quoting obligations and fee level. Advanced Market Makers have stricter quoting obligations and in return receive an additional rebate on trading fees for Order Book orders and orders in the Market Place Service (MPS), i.e. the manual order system. The Advanced Market Maker model is currently available on the Swedish market.

When a Market Maker Agreement is signed, an appendix needs to be signed for each market (Swedish, Danish, Finnish and Norwegian) where the member wishes to become a Market Maker.

Monthly/Yearly Market Making Fee Model

Market Makers in Swedish equity derivatives can choose to follow either a monthly Market Maker fee model or an annual Market Maker fee model.

In the monthly Market Maker fee model, the fees charged per contract will be based on accumulated number of traded contracts for the calendar month in question. The different fee levels can be found in the Market Maker Fee List in the Rules and Regulations of Nasdaq Derivatives Markets.

Market Makers who follow the monthly model, will have the same quoting obligations as Market Makers in the annual model.