Exchanges and clearing houses have taken different approaches to the application of incentives for members
There has been a spate of incentive
schemes announced and launched this year. While some see them
as a key tool in driving liquidity, how important are such
schemes to traders and their trading strategies? Alice Attwood
Incentives for trading and market-maker
schemes are interwoven into the fabric of the market, whether
to ignite and grow liquidity in a new, innovative contract, or
to pull trading from an incumbent for a period of time, with
the goal that liquidity will stick once the agreements
Why do they exist?
The financial implications and contract
specifications of deals between traders and exchanges vary
massively, ranging from fee-free trading periods, contributions
to trading and running costs, and rebates on executed trades,
to the commitment to make prices for a certain amount of the
trading day or pledge open interest.
This article is available to subscribers and registered users
Please log in to continue reading.
Not yet registered? Take a free trial.
If you have already taken a free trial you
have ongoing access to the analysis section of FOW.com including this story.
Log in using your details below to read.
Already have an account? |