The Lab

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Synopsis

there are two basic motivations for makers when offering liquidity:

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  • Interest: The tier is a reflection of a Makers exhaust preferences, to trade down positions built up in other flows. In this model the ladder will typically be presenting more liquidity on one side, in an asymmetric fashion, i.e. pricing will be much tighter on the side where trading is preferred. The volume bands can be entirely dynamic - published rung positions, varying from tick to tick. There is a reduced requirement to show indicative prices here, as the intention of the Maker is often to zero-out previously published liquidity. This method makes it perfectly feasible for liquidity to be published on a single side only.

Multi-level Quotes

There are some venues that allow the submission of multi-level quotes to the market (such as the example below).

 

USD/JPY

RateQuantity in
Millions
112.501M
112.492M
112.485M

 

Whisperer does support the submission of multi-level quotes (also referred to as a ladder/or tiered quotes), imposing no restrictions on what a customer decides to publish using the API.

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Info
titleNote

However, exactly what customers are able to publish will vary dependant on the venue and the bilateral agreement for the connection between the customer and the ECN.



 

To be continued...