Continuous Auction with Market Maker

Continuous Auction with Market Maker

Deutsche Börse Cash Market offers a Continuous Auction with Market Maker trading model for trading structured products at the Frankfurt Stock Exchange:

  • Market Makers increase the attractiveness of structured products by committing to provide liquidity.
  • Investors benefit from continuous information about the price of structured products, and their fungibility.

 

Trading venue: Frankfurt Stock Exchange (FWB®)

Trading time: 9.00 a.m.–8.00 p.m.

Tradable instruments: Structured products
For each security there is exactly one Market Maker.

 

The Market Maker’s duties

In the Continuous Auction with Market Maker, it is the duty of the Market Maker to furnish the main liquidity for the security. His duties are:

 

  • Continuous market information by inputting Standard Quotes during the entire trading period.
    In the Standard Quotes, the Market Maker takes the order book as well as the minimum quote volumes and maximum spreads agreed with Deutsche Börse AG into account.
  • Inputting a Matching Quote in the event of a potentially executable order book situation:
    There is a potentially executable order book situation if: (1) a Market Order or an order exists in a crossed order book with no available Market Maker quote; (2) the volume of the orders that can be executed at the Market Maker quote (including the volume of orders on the other side that can be executed) exceed the quote volume; or (3) the Stop Limit of a Stop Order has been reached by the Standard Quote. By means of the Matching Quote, the Market Maker defines the spread within which the trading system calculates the price in accordance with the principle of highest executable volume. This way, the Market Maker ensures that orders are only executed at market prices.
  • Provision of additional liquidity to bridge a lack of offer or demand for the execution of an order.

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