Massive DBS Partners Blows Up, Barely a Ripple in Markets

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Massive DBS Partners Blows Up, Yet it Barely Causes a Ripple in Stock Markets.

DBS Partners Shut After Goldman Margin Call

DBS Partners, one of the biggest market makers in S&P 500 Index options, was shut after failing to meet a margin call from Goldman Sachs...

The exit of a major market maker, voluntary or not, can sometimes suck liquidity from a contract, making it harder for investors to get deals done if there are not enough other firms to fill the vacuum. Index options are CBOE's highest-revenue business. and a drop in liquidity would hurt parent CBOE Holdings.

But the DBS blowup, despite its massive size, made barely a ripple in the wider market, traders in the S&P index options pit said. The position was sold at just about the mid-point of the market's bid and ask prices, one trader who witnessed the sale said...

The absence of the DBS traders this week was hardly noticeable in the S&P 500 index options pit, where traders stand in close quarters as they vie for trades.

 

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