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title: The New Age of Market Making
description: The New Age of Market Making
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[TRACE Turns 20](https://articles.marketsmedia.com/trace-turns-20)

 03.30.2012

 By Markets Media

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# The New Age of Market Making

 03.30.2012 By Markets Media

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Some say that market making is a dying art of sorts. A necessary component of the capital markets system we currently operate that has become less and less profitable. Since stocks moved from being quoted in fractions to decimalization in 2000, spreads have tightened and the cost of keeping up with technology build outs and speeds of the electronic market makers have changed the way trading firms make markets.

With tighter spreads come new ways to incentivize trading firms to make markets in specific names. The exchanges have been at the forefront of shaking things up, coming up with new ways to make markets such as Chicago Board Options Exchange's Remote Market Maker (RMM) program and the ISE's Competitive Market Maker solution.

"The ISE has been pushing this new CMM program as a way to offer deeper liquidity in more names," said an options specialist at a NYSE Amex executing broker. "The CMM program essentially gives firms the right to more volume and as you can imagine, brokers are desperately searching for volume anywhere they can these days."

ISE's re-tooled CMM program has attracted new and old talent to the exchange. Earlier in March, Tibra Trading signed up with the exchange to become a CMM. In a release, Tibra's Head of Business Development Sam Dawson summed up the attractive nature of the CMM program, saying that "ISE’s flexible market making program and robust technology platform offered us a compelling reason to join ISE’s market making community."

The influx of new business ISE has witnessed will undoubtedly lead other options and equity exchanges to come up with ideas, products and services that will help them stay competitive and attract volume.

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