FlexTrade Systems, Inc., a global leader in multi-asset, broker-neutral execution and order management systems, today introduced two new trading solutions for its FlexOPT options trading repertoire: FlexOPT-RM, an advanced risk management and stress testing platform, and FlexOPT-OMM, a flexible order-driven market making platform.
According to Vijay Kedia, president and CEO of FlexTrade, FlexOPT-RM and FlexOPT-OMM represent the next generation in the company’s options offering. “We’ve had a primary options OMS & EMS platform called FlexOPT for a number of years now,” he said. “But with the growth and complexity of electronic trading in options, the need for additional platforms became apparent.”
Offers comprehensive real-time risk and stress analysis whereby traders can analyze risk by portfolios, sectors, traders, accounts or any level of aggregation/hierarchy. Primary features include:
- An open architecture with API interface to integrate valuation models, volatilities and interest rates.
- Graphic analysis and review of P&L as well as the contribution to P&L from Greeks, such as Delta, Gamma, Vega and Theta.
- The capability to slice and dice your portfolio by underlying, expiration, account, etc., or to analyze your entire portfolio.
- Stress tests defined in terms of spot and volatility shifts and the ability for traders to review the impact on their Delta, Gamma, Vega, etc., projected at multiple future dates.
- Volatility surfaces for risk and stress analysis are computed in near real-time.
- The capability to drill down to specific stress scenarios or graphically review a range of stress scenarios.
- Testing of possible scenarios by adding candidate trades and viewing the affect on risk and stress testing.
A flexible order-driven market making platform for advanced options traders. It provides a comprehensive user interface for configuring an order strategy. The pricing engine can be fully customized by the trader and loaded into the system as a dynamic module. Positions can be grouped and viewed at various levels, and a robust hierarchy of risk limits ensures that the trader can manage risk in real-time. The risk limits can be specified for position quantities, as well as Greeks such as Delta, Gamma and Vega. Primary features include:
- Ability to load option chains based on underlying symbol, expiry date and strike price.
- Ability to preload a portfolio from the prior day, carryover of previous positions.
- Customizable pricing model and hedging strategy.
- Customizable volatility model with intuitive and powerful GUI to manage volatility curves.
- A simple GUI to start and stop order-quoting for individual contracts or all contracts collectively.
- A "test" mode to check orders without submitting to an exchange.
- Flexible rules to replace orders (based on the magnitude of the price change).
- Adjustable reinstatement logic to replenish orders that have been filled.
- Customized selection of underlying instruments (e.g., a futures contract can be chosen as the underlying proxy instrument for cash options).
- Ability to select the underlying instrument on the basis of liquidity.
- Risk limits for positions and Greeks, at contract, strike, expiry and underlying level.
- Hypothetical scenarios to plot P&L based on variations in underlying price, volatility and Greeks.
- System configuration settings stored in XML file format, which can be loaded and viewed in any XML browser.
