Banc of America Securities introduces smart order routing for equity options
25 January 2006 | 1906 views | 0
Source: Banc of America Securities
Banc of America Securities' (BAS) Electronic Trading Services group today announced that smart order routing for equity options has been added to its InstaQuote direct market access platform.
This new technology enables InstaQuote users to efficiently transact equity options orders across a vast network of liquidity, thereby lessening their dependency on the exchange linkage system.
The options order routing technology constantly scans the listed options exchanges to find the National Best Bid or Offer (NBBO) or better for orders placed through the system. The technology also has the ability to route orders automatically to seek best execution.
"Smart order routing capabilities for options is anonymous and easy to use, and optimizes execution quality with each transaction. We believe this will be invaluable for InstaQuote users," said Rob Flatley, co-head of Electronic Trading Services sales at BAS. "As advanced forms of electronic trading grow in popularity, derivatives markets represent the next major frontier for the sophisticated, strategy-driven tools already at work in the cash equities space."
In a study conducted earlier this year in conjunction with Financial Insights, BAS found that about 5% of all equity orders were executed using trading algorithms, with this number expected to increase to 20% by 2007. BAS estimates that these and similar trading tools will gain traction even more rapidly in the equity derivatives markets.
"In response to broader demand for technologies that support execution quality and price improvement, BAS is leveraging its position as a leading provider of trading solutions for equity markets to pioneer innovations that facilitate optimization of trading functions in derivatives markets," continued Flatley. "The options markets are an ideal environment for liquidity aggregators and decision support technologies and by using BAS' vast expertise in cash equities electronic trading we hope to foster greater understanding of electronic best execution practices in the equity derivatives markets."