Traders Plead With Regulator to Overhaul U.S. Options Auctions
- Market-making firms and industry groups ask SEC for fixes
- Critics say auctions remove liquidity from normal trading
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Traders are urging U.S. regulators to fix a part of the options market that some blame for contributing to the last five years of stagnant trading.
Auctions, which mainly match orders from individual investors, may have reduced competition during normal trading. The relative attractiveness of auctions could be reducing liquidity in the options market as market makers cut their efforts elsewhere during continuous trading.