MIAX Options Fast Out of the Gate
Traders Magazine Online News, December 17, 2012
The MIAX Options Exchange, the industry’s newest, is off to a strong start.
The exchange trades only one options class—Cliffs Natural Resources—but has garnered between 3 percent and 6 percent of the volume in the name on the five days since it launched.
Data from the Options Clearing Corporation show that is a higher market share in that class than the Chicago Board Options Exchange’s C2 venue and the BATS Options Exchange. It puts the MIAX in the same league as the BOX Options Exchange, in that name. Supporting the Princeton, N.J.-based MIAX in its early days is Morgan Stanley as the Cliffs’ primary lead market maker. At MIAX, there are three levels of market making, with the Primary Lead Market Maker at the top of the heap. There is only one PLMM per options class. The PLMM has both greater obligations and benefits.
MIAX is geared towards market makers, offering a pro-rata order allocation methodology, directed orders, and a payment-for-order-flow scheme. The model contrasts with that of BATS, C2, BOX, NYSE Arca, and Nasdaq Options Market, which treat all traders equally.
Currently, all trading at MIAX is free until the end of the year, although there are marketing (PFOF) and routing fees.
According to the company it has signed up 27 firms as members, including both market makers and order entry firms. Additional firms are “close to completing the membership process,” the company said in a recent statement.
MIAX was built by a team of former Nasdaq OMX PHLX business and technology executives, led by Shelly Brown.
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