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Informist, Wednesday, Nov. 27, 2024

 

NEW DELHI – The National Commodity and Derivatives Exchange Ltd. has invited bids from interested applicants for the role of designated market maker for guar gum options on futures contracts, the exchange said in a circular. Interested candidates can apply by Dec. 3, it said.

 

The exchange will appoint a market maker under the liquidity enhancement scheme in guar gum options to encourage active participation, the circular said. A market maker appointed by an exchange provides liquidity and depth to markets and profits from the difference in the bid-ask spread. Market depth refers to a market's ability to absorb relatively large orders without significantly impacting the price of the security.

 

The eligibility criteria are a net worth of at least INR 10 million. The exchange will offer a maximum incentive of INR 2.5 million per month, the circular said.

 

The designated market maker is required to have 85% of trading time daily from 1000 IST to 1700 IST on the market-making on the near-month options contract for the full monthly incentive amount, the circular said. "Presence below 70% will not be eligible for payout," it said. To ensure market depth, quotes are required at top 5 level in the order book, the circular said. End

 

Reported by Afra Abubacker

Edited by Saji George Titus

 

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