Comment by chroma205
2 hours ago
> There are no exchanges where market makers get any kind of priority to bypass the FIFO queue.
Nope, several large, active, and liquid markets in the US.
Legally it’s not named “bypass the FIFO queue”. That would be dumb.
In practice, it goes by politically correct names such as “designated market maker fill” or “institutional order prioritization” or “leveling round”.
I can tell you as someone who is a designated market maker on several ETFs in the U.S., none of this exists as a means of giving market makers priority fills. You're taking existing terms and misusing them. For example institutional order prioritization is used as a wash trade prevention mechanism, not as a way for designated market makers to get some kind of fill preference. Leveling rounds also do not involve exchanges, this is an internal tool used by a broker's OMS to rebalance residuals so accounts end up with the intended allocation, or cleaning up odd-lot/mixed-lot leftovers.
I am getting the feeling you either are not actually a quant, or you were a quant and just misheard and confused a lot of things together, but one thing is for sure... your claim that market makers get some kind of priority fills is factually incorrect.