CBOE Holdings, Inc. (NASDAQ: CBOE) announced today that it plans to invest in Tradelegs, the developer of advanced decision-support software that institutional investors can employ to optimize investment performance.
Institutional subscribers to Tradelegs Derivatives Strategist software - from hedge funds and mutual funds to pension funds and insurance firms - can enter their views on given securities into Tradelegs' analytics platform.
Derivatives Strategist calculates the result of numerous combinations of options/underlying positions that correspond to the user's specific trading view and risk parameters -- maximum capital available, worst-case risk and probability of price movements -- and identifies the potential trade or trades that incorporate those parameters.
"Our planned investment in Tradelegs is a natural fit for CBOE. The technology's application supports our strategic objective to further expand the institutional use and appeal of options trading, including with our proprietary index products," CBOE Holdings CEO Edward T. Tilly said. "Tradelegs' advanced analytics and intuitive software make it a valuable trading resource for institutions that want an uncomplicated way to formulate options-based strategies that could enhance their equity positions."
"We couldn't be more pleased that CBOE, the world's leader in index option and volatility trading, recognizes our potential to penetrate the institutional market with a program that could help users more efficiently generate options strategies that might be employed to optimize investment performance," said Gideon Agar, CEO of Tradelegs. "CBOE's investment should allow us to further expand our options optimization services, including the capability to cover portfolios of securities sometime this year."
The investment is subject to the execution and delivery of a definitive agreement between CBOE and Tradelegs.