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Wolverine Trading In Trouble?

Courtesy of Tyler Durden

From FMX Connect

Update: Reliable sources in the trading community with closer ties to Wolverine assured us that the story published about Wolverine Trading has zero validity.

In age where the velocity of information, true or false, has increased tenfold with sources like twitter and internet networks, it is important to follow up these type of rumors as they could hamper a firms ability to transact business.  We are inclined to believe subsequent information relayed to us that this story is untrue.

Wolverine Trading In Trouble

We received contacts from several independent sources in our community yesterday that Wolverine Trading, a PMM, options market-making firm in everything from global equities to commodities may have solvency issues. As of this writing this is unsubstantiated. Sources were CME floor members and financial analysts familiar with their business model. The only physical sign we saw was a lack of physical presence in some major commodity option pits for the last two days.

If this is true it would be a terrible thing for the markets, as Wolverine was a classic market-making firm, one that provided backstop liquidity in all kinds of assets.

Historically, the biggest market-making firms almost always run the risk of putting themselves out of business as spreads narrow. The smarter ones of which wolverine is one, seek out other areas to trade. Some look for more complex, lower correlation strategies on which they put speculative positions.

HFT: Market Structure Trumps Talent Again?

What is troubling here is that this just might be symptomatic of the increased predation of HFT algorithms with no actual obligations to provide liquidity gaming those that have obligations, like Wolverine. Our friends at ZeroHedge are no less sanguine when they discuss this, using terms like Quote Stuffing, and Front Running to game marketmaking algorithms.

As an aside, HFT frivolous bids and banks in search of the bigger fool on which to unload their own stocks to are a set up for liquidity disaster. But now, if wolverine is in trouble, another obstacle to an outright market debacle has been removed.

Specialists (Wolverine was not one) were in the past characterized as conflicted and having a license to steal. They were sheep shearers for sure, but in this environment, the regulatory, technological and economic factors are fixing to skin the sheep as a final exit strategy in the U.S. market.

About Wolverine

Established in 1994, our proprietary trading group, Wolverine Trading, LLC, engages in market making and valuation arbitrage across global markets. We aggregate information from our vast exchange network and overlay quantitative data sets. Our electronic trading technology allows us to capture theoretical pricing discrepancies across exchanges, products, and markets. 

As a market maker, we provide continuous bid and offer quotations on a broad range of listed securities and derivatives, including:  equities and equity options; equity indexes and equity index options; futures and options on futures; Exchange Traded Funds (ETFs) and ETF options; and cash bonds. Our quotes add liquidity and transparency to the markets. Wolverine is a leading liquidity provider in global exchange-listed equity derivatives.

As valuation arbitrage traders, we employ strategies such as index arbitrage, volatility dispersion trading, basket trading, sector trading, statistical arbitrage, and quantitative strategies.


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Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

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