Quote from: Kato on April 08, 2013, 02:04:55 AM

Fireball, the difficulty as I see it is that a market maker or arbitrager needs to have confidence that some or all of their positions will not be unexpectedly and forcibly closed to facilitate the liquidation of another trader, which has happened frequently. This would make it nearly impossible to manage and hedge risk in the book. You might argue this is chicken and egg. Maybe, but can you propose how market makers would be protected from this?

That's why I'm proposing this. Market maker status would guarantee that their positions remain intact no matter what (however, they would still have to have maintenance margin, of course).