Crypto Options Market Has Become More 'Interdealer' Since FTX's Blowup: Paradigm

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According to tradeparadigm, a higher proportion of crypto options trading is taking place between market makers as buy-side entities keep a low profile amid FTX contagion fears. reports godbole17

As of Friday, the notional value of the month-to-date interdealer flow on the institutional-grade, over-the-counter communications platformwas $633 million, or 43.5% of the total crypto options trading volume of $1,455 million. That's the highest since at least January this year.

An options trade is said to be an interdealer trade when both the price taker and the price maker are market-making firms, that is entities with a contractual obligation to maintain a healthy level of liquidity on an exchange. The crypto market, like traditional finance, comprises the"buy-side" and the"sell-side." The buy-side invests in assets and includes pension funds, mutual funds, institutional investors, hedge funds and retail investors. The sell-side, which includes commercial banks, investment banks,, stockbrokers and other entities, is concerned with creating, promoting and issuing traded securities.

Interdealer flows or trading between market makers now account for a higher-than-usual share of the total trading volume.

 

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