BATS Options has given market makers the ability to quote in bulk.
The options exchange, in its second major overture to market makers in the past year, introduced functionality this month that is expected to make it easier for dealers to put up a large number of quotes at once.
The “bulk quoting interface,” as it is called, replaces existing order entry functionality that is ill-suited to the quote management needs of market makers.
The new service offers two advantages. First, it will allow dealers to publish a bid and an offer in a single message rather than two, as is the case now. Second, it will allow market makers to bundle several quote updates into one message.
Bulk quoting marks BATS’ second gift to market makers since it launched options trading last year. The first was a plan to introduce directed order functionality that BATS later scrapped.
In offering the new functionality, BATS joins the Nasdaq Options Market which is rolling out a bulk quoting service of its own today.
Unlike traditional options exchanges, both BATS and NOM have not built their businesses around market maker quoting. In general, they treat dealers like any other trader, granting them no special privileges such as order allocation guarantees.
