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Goldman Sachs to Withdraw From Part of U.S. Options MarketBy
Will stop serving as a market maker on U.S. exchanges
Traders struggling with high costs, low volatility in options
Goldman Sachs Group Inc. will stop serving as a market maker on U.S. options exchanges, following others in exiting that business amid high costs, sluggish volume and low volatility.
Market makers have greater obligations than regular traders, agreeing to quote prices for a minimum amount of time. The New York-based bank will continue to enable trading for its clients, according to a statement Thursday.
“While Goldman Sachs will no longer hold the on-exchange options market-maker designation, we remain committed to the options business and will continue to offer clients the full range of relevant products, such as access to listed options across all U.S. exchanges and access to our principal liquidity,” Goldman Sachs spokeswoman Tiffany Galvin-Cohen said in an email.
Automated traders like Citadel Securities LLC and Susquehanna International Group LLP now dominate the options market. Earlier this year, Interactive Brokers Group Inc. sold its Timber Hill options market-making unit -- a pioneer of electronic trading -- to Two Sigma Securities. Firms have struggled to keep up with the high cost of technology and the expense of being connected to the fragmented U.S. options market, which is spread across 15 exchanges.