Tradeweb Adds Futures to European Equity Derivatives PlatformBy Tradeweb Markets Llc, PRNE
Monday, July 11, 2011
LONDON, July 12, 2011 -
Tradeweb Markets LLC, a leader in building and operating
financial markets, today announced the addition of European equity
futures to its multi-dealer-to-client equity derivatives platform.
The new functionality streamlines the current phone-based,
over-the-counter trading experience for block trades. By using the
platform, institutional investors can put dealers into competition
before the trades are submitted to the major derivatives exchanges
for final pricing, clearing, and settlement.
This enhancement complements the existing equity options
offering, allowing clients to negotiate futures trades on the
universe of European-based equity indices, sector indices and
single stocks on Tradeweb. The new functionality provides faster
transaction times, better price discovery, and more efficient
access to third-party technologies, such as order management
systems and derivatives exchanges.
This is Tradeweb’s first foray into delta one products, which
are synthetic instruments that move in the same direction and at
the same speed as the underlying, and are commonly used to achieve
low-cost exposure to a stock or index.
“Equity futures are a valuable enhancement for many of our
clients that trade synthetic equity,” said Adriano Pace, Tradeweb’s
director of equity derivatives markets. “We plan to further expand
the range of delta one products available on the platform.”
On Tradeweb, clients put up to five dealers in competition
through a request-for-quote (RFQ) trading protocol, achieving
improved price discovery and best execution reporting, including a
permanent audit trail for compliance purposes.
“A typical equity derivatives auction often takes more time than
it does with other instruments, but clients like to have more
certainty and structure to the process,” Pace said. “That’s why we
designed an electronic marketplace that would provide a faster
auction, in which clients receive responses from dealers within
There are 12 dealers currently providing liquidity to the
platform across all listed and “flex” futures on all eligible
European exchanges, and clients can trade using outright or
calendar spread strategies. The platform also supports delta
working and delta exchange requests with the addition of risk
pricing, live, executable prices that embed all market risk,
planned for later this year.
Tradeweb launched its equity derivatives marketplace in 2010 in
response to demand from market participants for an electronic
solution that provides increased transparency and efficiency in
equity derivatives trading.
Tradeweb is a leader in building and operating financial
markets. As a pioneer in the development of electronic trading and
trade processing, the company provides services in the fixed income
and derivatives markets to clients in more than 50 countries. Since
1998, Tradeweb has operated a global fixed income and derivatives
trading network that harnesses the distribution of the major
investment banks with over 2,000 institutional clients. In 2008,
Tradeweb introduced inter-dealing broking capability with the
acquisition of voice broker Hilliard Farber and subsequently
launched Dealerweb, an electronic IDB platform. Tradeweb
Retail provides a trading and sales application to fixed income
brokers and traders.
Notes to Editors
Flex futures are bilaterally negotiated derivatives between two
counterparties that are able to be booked and cleared (settled) at
the exchange, allowing clients to customize some of the terms of
the future such as the expiry date, strike and settlement type.
A delta exchange order, or “market-neutral” order, allows the
client and the dealer to exchange the hedging asset as well the
future(s) in such a way that immediate market risk is eliminated.
Also known as an “agency order,” a delta working order is a
directional order in which the client, having accepted a dealer’s
terms, needs to wait for the dealer to cover its market risk. The
order is not complete until the dealer has bought/sold a sufficient
number of units in the hedging asset.
Tags: July 12, London, Tradeweb Markets Llc, United Kingdom