Trade Talk Blog: Another Option (Literally) for Trading with TT®: Introducing Options on TT®


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Options Trading on TT

Last month, buried far beneath headlines on widely covered legislative battles, a relatively minor bill quietly made its way out of the U.S. House Financial Services Committee and onto the House floor. The Options Markets Stability Act, if passed, will allow financial institutions to use more sophisticated methods of risk calculation when assessing exposure on positions in derivatives, and particularly in options. While that’s certainly not the most thrilling introduction, the effect of measures like this will be to essentially allow for greater liquidity and more market making across options markets. Now that could be exciting.

It’s not that the landscape of options trading will be radically altered because of this, but stories like this one have become more frequent recently as traders and investors look for opportunities and liquidity in the options market.

At Trading Technologies, we have long focused on futures markets and have given options only a cursory glance. That has changed. We have turned much of our recent focus towards enhancing our presence in options markets, largely due to demand from our longtime users, but also in response to increased global interest.

We’ve added several widgets to the TT platform that are specifically designed for options traders. These widgets, which include Options Chain, RFQ Viewer and Options Trade Monitor, provide better and more intuitive views into options markets. For anyone watching options markets, these are essential tools that Trading Technologies has not previously offered. Additionally, because options traders need enhanced tools to monitor and manage their positions, our Advanced Options Package includes Options Risk, Risk Matrix and Expiration Manager.

Most notable, however, is the addition to TT of options analytics, including volatility curves, theoretical values and Greeks. With the increased interest in options, traders are quickly becoming more educated and sophisticated and require analysis that TT hadn’t provided in the past. I’ve been pleased and excited to receive queries from users asking complex questions on risk management and measures of volatility. And while most traders may not be quite as enthusiastic as I am when it comes to discussing the intricate details of Greeks and risk metrics, it’s clear that more and more people are dipping their toe (or more) into the world of options pricing and analysis.

With the agility and adaptability of the TT platform, it’s much easier and faster for us to add features and functionality in response to traders’ requests. And we’re just getting started with Options on TT. Most exciting of all are the prospects offered when applying these sorts of options tools to TT’s world-class automated execution and algorithmic trading tools, which has the possibility to bring a new level of strategy and sophistication to options traders everywhere.

OK, so perhaps you who are reading this will never be as enlivened as I am by the prospect of new legislation on derivatives. But you could be. And TT is ready and positioned to share in that enthusiasm.

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