Danish multi-asset brokerage Saxo Bank has released a newly developed type of order tickets which allows contract options traders to simultaneously buy or sell a number of different options that traditionally could only be achieved by placing separate orders.
The new combination order ticket, also sometimes known as combo or complex tickets, is designed to simplify and accelerate order entry. It allows traders to buy or sell series of options on all offered US listed equity, ETF and index options in a single order ticket.
This special order type comprises two or more components or legs that execute as a single transaction. Each leg in a combination order ticket is defined with an asset, a leg side, and a ratio relative to other legs. The clients need to add an initial leg to begin the transaction and then insert subsequent legs to the transaction to create a multi-legged order.
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This type of order is primarily used in multi-legged strategies, such as straddle, which consist of many options while placing one order, sometimes for paying a lower commission. The Saxo’s new multi-leg ticket will also incorporate a display of option ‘Greeks’ and a margin calculation for each individual leg and strategy.
However, Saxo Bank didn’t clarify if they offer guaranteed execution for the multi-legged option transaction in which executions are guaranteed to be delivered simultaneously for each leg and in proportion to the leg ratio. This guarantee is often fulfilled by a broker or the exchange depending on the way the order is routed and executed.
Commenting on the launch, Georgio Stoev, Futures and Listed Options Product Manager at Saxo Bank, said: “Instead of trading options leg by leg using multiple trade tickets, the different legs can now be delivered as one order and executed as one. Through multi-legged strategies, clients will be presented with unique opportunities to participate in established option strategies such as straddle, ratio spreads and iron condor, among others.”
Patrice Henault, Saxo’s Head of Futures and Listed Options, added: “It is paramount that best execution practices keep up with the evolving landscape and this is a major milestone for Saxo Bank in consolidating our leadership as a multi-asset trading and investment specialist. Clients using the new ticket will benefit from capital efficiencies, reduced market risk and ability to analyze strategies before execution.”