Global Trading Systems (GTS), the largest designated market maker on the New York Stock Exchange, has closed the deal to acquire Barclays’ equities automated options trading unit’s assets. Financial terms of the deal were not disclosed.
The UK lender’s New York-based unit buys and sells options to offer liquidity in the US derivatives markets. Upon completion of the acquisition, nearly 40 Barclays personnel will become full-time employees at GTS, the company said Wednesday.
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.
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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 challenges Citadel Securities and Virtu
GTS’ offering leans on proprietary algorithms to trade in a range of commodities, futures, forex, and derivatives around the world. Earlier this year, 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.
Ari Rubenstein, co-founder and CEO of GTS, commented on the deal: “The options trading acquisition is another step in GTS’s mission to build out its global capital markets business and to put superior trading technology to use for all who may benefit. The acquisition furthers GTS’s expertise in providing data-driven precision pricing to investors. Options are an active asset class and important investment tool and are a highly complementary fit to our growing roster of global financial instruments.”