All option trades must occur on exchanges, which typically offer auctions that improve prices over existing quotes …. Wholesalers, that purchase orders from brokers, initiating auctions must be willing to trade at the existing best quote or better …. For S&P500 stocks, auctions are 23% of options volume and offer substantial price improvement of 50% of the quoted half …

-the-counter (OTC) derivatives markets. Although rehypothecation benefits the end user through cost reduction of derivative trades, it … suddenly defaults. To evaluate the benefits and risks of rehypothecation, we propose a derivative pricing framework with … of derivative trades: two different types of collateral, the time delay of collateral posting and the rating …