Market Maker Obligations
Minimum Quoting Requirements
BOX conducts random reviews of each Market Maker’s bids and offers throughout the trading session. Within a given class for which he is appointed Market Maker ,The BOX Market Maker must have a valid bid/offer pair at least 60% of the time on each of the classes for which he holds a market maker assignment on BOX. Additionally, the Market Maker must have a valid bid/offer pair at least 80% of the time on 90% of the classes for which he holds a market maker assignment.
Except when exempted by a BOX Official, or in instances of fast markets declared by BOX, A "valid" bid and offer pair is defined as a bid and an offer, each for at least the minimum quantity as defined by the BOX rules ("ten contracts"), separated by a differential no greater than where the Bids, offers differences of no more than $5 between the bid and offer following the opening phase for each options contract. For the opening phase, spread differentials shall be no more than:
| Premium Value | Spread Differential |
|---|---|
| $0.00 to $1.99 | $0.25 |
| $2.00 to $4.99 | $0.40 |
| $5.00 to $9.99 | $0.50 |
| $10.00 to $19.99 | $0.80 |
| $20.00 or more | $1.00 |
Requests for Quote
BOX Market Makers are obliged to respond to all Requests for Quote (RFQ) messages for their assigned classes when they are not posting a current valid market for the option instrument for which the RFQ is issued. The "validity" criteria outlined above is applicable in this case.
Penalties
Each day, the BOX Market Maker Participant must meet the above criteria for the classes for which he is a market maker. A financial penalty is due from the Participant for each class for which his obligations are not met.
