As if the options market was not challenging enough for the average investor, the somewhat controversial Maker-Taker pricing is being adopted for several equities, and Sirius XM Radio is among them. Beginning Monday, May 3rd, 2010. The Maker-taker concept is being rolled out by several exchanges in an effort to bolster liquidity in the market by rewarding market makers who add liquidity with rebates, while charging fees to those that remove liquidity.
The Maker-Taker concept, because of the rebates given, attracts business to certain exchanges. Exchanges that have begun rolling out the new policy have seen their market share increase. Nasdaq OMX announced today that it would apply maker-taker pricing to five more symbols on its PHLX exchange. The list included Sirius XM Radio Inc.
For the average investor, the news means very little other than the options market has seen increased volume because of the Maker-taker policy. Depending on your take on options trading, this could be a good or bad thing.
In separate news, Sirius XM's short interest, as of April 15th, was up 20% to 131,600,204 shares. Given current volume levels, this short position could be covered in one day. It should be noted that short positions are normal in an equity. In particular as a hedge for convertibles. Current short interest is not outside the range that would be considered normal for this equity.
Position - Long Sirius XM Radio