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Market maker obligations

The contractual terms under which a participant maintains two-sided quotes for an agreed share of trading time.

How to read the number

It is the obligation, not goodwill, that explains why the book of a rarely traded security does not empty on a quiet day.

When the metric lies

The duty is capped in size and in time. Beyond those caps the quotes disappear, and that is most visible exactly during a sharp move.

Also known as: quoting obligations

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