Tradeweb Markets, the online fixed-income trading platform, is making a major push in US share derivatives markets with the launch of its options platform for institutional customer-to-dealer trading.
Nine liquidity providers have already committed to supporting the new marketplace, including a mix of banks and proprietary trading firms (PTFs). The platform will also leverage Tradeweb’s institutional network of global dealers and buy-side customers.
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Tradeweb will support electronic trade execution of equity options on US stocks, as well as the major indices. Clients will be able to place several dealers in real-time competition for options, based on the request-for-quote functionality the company currently introduces for several asset classes including its US treasuries offering.
The request for quote (RFQ) protocol is widely used to make trades in illiquid markets, and venues compete by building rival quotes into a composite picture of the market. The practice has been approved as MiFID compliant to address best execution requirements and also comes within efforts to improve the efficiency of the equity derivatives market, following similar efforts for interest rate and swaps over the past few years.
Commenting on the news, Adam Gould, Head of U.S. Equities at Tradeweb, said: “Our institutional ETF trading platforms were an important step in enabling buy side institutions access to better pricing and size for block ETF trades. We’ve now expanded the Tradeweb RFQ model to U.S. options in direct response to clients who want the same value they experience executing ETFs on Tradeweb applied to options. Just as we’ve seen on our ETF platform, we expect our new options offering to drive better pricing for clients, while also streamlining their workflow and demonstrating best execution.”