Privileges
BOX Market Makers enjoy the following privileges in relation to other BOX Participants:
- Ability to process large volumes of order updates very rapidly using the mass-quoting message format for those classes in which it holds a market maker assignment
- Right to compete during the Price Improvement Period on classes in which it holds a Market Maker assignment
- Reduced trade execution fees in certain cases
- Market Maker protections on the Opening
- Heartbeat functionality to protect Market Makers in the event they become disconnected from the matching engine
Mass-Quoting
Only BOX Market Makers may use a special message type known as the "Bulk Quote" to send order messages and updates to the BOX trading engine. This message allows a BOX Market Maker to update a large quantity of options instruments (quantities and prices for bids and offers) with a single message. The Market Maker may only use these messages on options classes in which it holds an assignment as a BOX Market Maker.
Price Improvement Period (PIP)
Market Maker Priority at PIP Matching
In some cases, there will be a BOX Market Maker with time priority over other competing Improvement Orders participating in a given PIP. When a BOX Market Maker posts an order equal to or better than NBBO in the BOX Central Limit Order Book at the instant that a PIP is initiated and that Market Maker also has time priority in the BOX Book ahead of any other BOX Market Maker order or quote, that Market Maker will be designated Market Maker "Prime" (MMP) for the PIP.
If the MMP participates in the PIP and at the end of the process he has posted an order which is executable against the customer order, his order will have priority over those of all other Participants, except the OFP, for up to one-third of the quantity available for execution at that price limit (after the execution of the OFP's 40%, where applicable).
Directed Orders
Only BOX Market Makers may become certified to receive Directed Orders. Broker dealers who wish to offer access to the PIP to their clients, but are unable, themselves, to take the counterparty side of the trade necessary to initiate a PIP, may use the BOX "Directed Order" functionality. This system allows any BOX Participant to instruct BOX to route his orders to any BOX Market Maker for possible submission to the PIP.
Trade Execution Fees
In certain cases, BOX Market Makers are subject to lower trade execution fees than other BOX Participants. This is described in more detail in "Market Maker Fees".
