European options exchanges must introduce functionality that protects market makers in order to attract prices on screen, according to market participants.
Panelists at a discussion organised by Orc software said the trading technology "arms race" had resulted in market makers being vulnerable to competitors with faster systems. The result, they said, was that trading had left the screen and was being largely conducted by telephone, with the exchanges used simply to cross pre-arranged orders.
Robin Cave, md of equity markets at Merrill Lynch, said:...