The Chicago Board Options Exchange (CBOE) has selected seven firms to serve as electronic-Designated Primary Market Makers (e-DPMs).
e-DPMs were created as a new membership class at CBOE as part of the second phase of its Hybrid Trading System, Hybrid 2.0.
The firms named as e-DPMs are:
* Citadel Derivatives Group LLC
* Citigroup Global Markets
* Knight Financial Products LLC
* SLK-Hull Derivatives LLC
* Susquehanna Investment Group
* Timber Hill LLC
* Wolverine Trading LLC
William J. Brodsky, Chairman and CEO of the CBOE, said: "We are extremely pleased to partner with these firms to create the most dynamic trading force in the options industry. Hybrid 2.0 will build on the initial success of the Hybrid trading platform at CBOE, offering members and customers alike the benefits of increased access, market depth and liquidity."
The e-DPM designation was created to expand the benefits of the Hybrid Trading System by enabling a wider range of market participants to access the system. These e-DPMs will increase CBOE's universe of liquidity providers by allowing firms to stream quotes electronically into the CBOE Hybrid Trading System from any location.
Hybrid 2.0 also will include Remote Market Makers (RMMs) who will contribute to the CBOE pool of liquidity by remotely streaming quotes and trading electronically. The RMM designation was created for market makers who prefer to operate solely from outside of the trading crowd.
e-DPM and RMM quotes and liquidity will be consolidated with that of in-crowd market participants' through the Hybrid Trading System, resulting in a more robust marketplace with greater liquidity. Implementation of Hybrid 2.0 is expected to begin during summer 2004, pending regulatory approval.
CBOE developed its Hybrid Trading System to further blend the speed and efficiency of electronic trading with the benefits of a floor-based, auction market. The CBOE Hybrid Trading System was launched on 12 June 2003.