Barclays Says Goodbye to Equity Options Market Making Business

Barclays has offloaded a US business to GTS, which bought its designated market maker (DMM) business in 2016.

Electronic market maker Global Trading Systems (GTS) has completed the takeover of Barclays’ equities automated options trading unit’s assets. The amount of the deal, which was originally announced in late 2019, was not disclosed.

The New York-based market-making business of UK investment bank buys and sells options to offer liquidity in the US derivatives markets. As part of the transaction, nearly 40 Barclays personnel has become full-time employees at the largest designated market maker on the New York Stock Exchange.

The unit, internally known as Automated Volatility Trading, provides bid and ask prices for more than 735,000 securities across 13 global options exchanges. In total, it commands two percent of all exchange-traded equity options volume in the United States.

“The data-driven, pricing precision of GTS is more important than ever in today’s unpredictable and highly volatile market environment. As has been reinforced during the current crisis, superior trading technology is essential to market participants and the overall functioning of our capital markets,” said Ari Rubenstein, co-founder, and CEO of GTS.

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The decision from the multinational British bank to dispose of its options business marks the latest pull-back from investment banking operations as it looks to refocus its strategy and develop its core business lines. Further, this isn’t the first time Barclays has offloaded a US business to GTS, which bought its designated market maker (DMM) business in 2016.

GTS’ offering leans on proprietary algorithms to trade in a range of commodities, futures, forex, and derivatives around the world. Earlier in 2019, it also acquired Cantor Fitzgerald LP’s exchange-traded fund unit, making it look more like competitors Citadel Securities and Virtu, which are giants in handling orders from retail brokers.

In the US, Global Trading Systems trades securities only with other registered broker-dealers, while operates as principal via GTS Securities, LLC, a FINRA member broker-dealer. The company also serves as a market maker on a variety of exchanges in North America and Western Europe.

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