Market Makers

Market MakersLiquidity counts

Designated Sponsors on Xetra and FWB® the Frankfurt Stock Exchange specialists ensure trading is liquid and price quality is high.

Supply and demand do not always match – usually, prices and/or volumes of the securities differ between the sides of the order book. So-called market makers are used to make less liquid securities better tradeable. This increases the probability that placed orders will be executed. Investors prefer actively supported shares in line with the principle of “liquidity attracts liquidity”.

Shares in one of Deutsche Börse’s selection indices must be included in continuous trading. One criterion here is the security’s liquidity. Designated Sponsors guarantee higher liquidity on the trading venue Xetra®. In Xetra, Designated Sponsors (e.g. banks and securities trading houses) ensure that continuous trading is possible in less liquid securities by posting binding bid and sell prices (quotes).

Deutsche Börse provides its specialists service as a way of supporting small and medium-sized enterprises (SMEs) in trading on the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse, FWB®).

Overview of content

FWB Frankfurt Stock Exchange: Specialists

The trading model “Continuous Auction with Specialist” enhances FWB® the Frankfurt Stock Exchange’s appeal as an efficient trading platform, specifically for small and mid-caps. In addition, market members benefit from the most comprehensive product range in the world and from improved trading quality through the Specialists, who furnish liquidity.

Specialists ensure that equities traded in the ‘Continuous Auction’ market model remain liquid and continually tradable. They commit to post attractive spreads and avoid partial executions that make no business sense. Their duties include providing indicative price information based on current market conditions and furnishing additional liquidity.

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