4. Emergency Brake
The market makers are pushing out hundreds of thousands of quotes at a time and they want to make sure that if something goes wrong -- an algo gone wild, or whatever it is -- that there are some kinds of mechanisms.
—Kevin Murphy, head of U.S. option electronic execution at Citigroup Global Markets, said that exchanges and market makers are now looking at creating "speed bumps" to prevent a market maker's algo on one exchange from spilling over to other markets.
Greg MacSweeney is editorial director of InformationWeek Financial Services, whose brands include Wall Street & Technology, Bank Systems & Technology, Advanced Trading, and Insurance & Technology. View Full Bio