Traders are seeking to diversify the asset classes, and are directing order flow toward the derivatives markets.
“End users are looking to diversify into all markets and see where they have more opportunity to generate alpha, and the derivatives markets offer such opportunities,” said Tim Geannopulos, executive vice president at Trading Technologies International (TT), a provider of derivatives trading software.
TT has responded by offering flat rate pricing for its flagship X_Trader platform, which connects to some 35 derivatives markets, and by creating a new multibroker capability that allows traders to direct order flow to the broker of their choice.
TT is offering X_TRADER with bundled access to all of TT’s supported markets for the flat rate of $500 per month and X_TRADER Pro for a reduced price of $1200 per month. Also, X_TRADER will now include synthetic order functionality through its Synthetic Strategy Engine (Synthetic SE), which was previously available only with X_TRADER Pro.
MarketDelta, a trading software developer, has licensed TT's entire patent portfolio, which includes more than 400 patents for electronic trading in financial markets, in order to create new products based on TT’s intellectual property.
"We are looking forward to offering our customers a trading interface incorporating TT's technology. We have seen significant growth in our products lately and look to improve our software by licensing TT's technology. We believe our tools provide traders with an edge, and by incorporating TT's patents we will significantly increase our customers’ trading efficiency," said Trevor Harnett, CEO of MarketDelta.
Exchanges are also beefing up their offerings.
Turquoise Derivatives, part of London Stock Exchange Group (LSEG), plans to offer trade reporting in 19 UK single stock options. The underlying stocks are predominantly constituents of either the FTSE 100 or FTSE 250.
The new products will clear through LCH.Clearnet Ltd, alongside the current derivatives offering. Until the end of September 2013, no trade reporting, clearing or expiry fees will be charged.
“This is an exciting development in our derivatives offering. For the first time, customers will be able to trade UK single stock options through our markets, alongside existing FTSE 100 futures and options,” said Nicolas Bertrand, head of equity and derivatives markets at LSEG.
The options will be based on leading UK-listed mining, oil and gas equities. Turquoise Derivatives members will have the opportunity to benefit from cross-margining with positions held in options and futures within the platform’s existing suite of single stock products, including IOB and Norwegian derivatives.
“For our members, this means a wider range of complementary products available through a single platform,” said Bertrand. “For us, it is a significant step in offering a comprehensive, competitive derivatives venue alongside a diverse set of markets and services within the Group.”
Trading Technologies is launching a managed software service, MultiBroker, which will enable clients to enter orders from its X_Trader platform and route them to any of its participating brokers through a direct market access network.
MultiBroker will allow traders to choose between brokers when routing orders directly to the world’s major futures exchanges through TTNet, Trading Technologies’ managed global hosting solution. Eleven major sell-side banks are participating in the beta program.
“TT’s buy side customer base, which is our fastest growing segment, really wants this flexibility to route orders to multiple brokers on one TT screen,” said Geannopulos. “One of the reasons we have 11 FCMs for beta is they want to go on offense and part pate in MultiBroker to compete for business.”
