Goldman Sachs Electronic Trading (GSET) announced today several new features of its US listed options offering, including three new algorithms (Pegging, Volatility Limit, and Strike), the ability to auto-hedge options orders, and a more diverse offering of connectivity to broker-neutral trading and pricing platforms.
The addition of Pegging, Volatility Limit and Strike brings GSET’s total number of advanced options trading strategies to seven.- The Pegging algorithm allows the user to peg all or a portion of an order to the bid or offer.
- The Volatility Limit algorithm orders will take the user’s assumptions on volatility, interest rates and dividends to monitor the market and sweep all liquidity when marketable.
- Building on the success of the SIGMA options smart router, Strike offers the elements of market sweeping, pegging, stealth and discretion all in one algorithm.
An additional enhancement to the options algorithmic suite is the ability for customers to auto- hedge their positions. This enables option traders to automatically execute equity hedges in real time as the option order is filled. This logic will leverage the available suite of equity algorithms to achieve immediate execution, while minimizing market impact by interacting with Goldman Sachs’ dark pool, SIGMA X, the largest in the U.S. (Tabb Group, 2008). Auto-hedging can be applied to any of the existing options algorithms.
Clients can access Goldman Sachs’ electronic options capabilities via REDIPlus®, the firm’s award-winning Execution Management System, or via a third party, broker-neutral platform. GSET is investing significantly to make its complete electronic options offering available via several OMS and EMS providers, including Derivix, thinkorswim and Bloomberg EMSX. Additionally, GSET completed integration with Orc Software’s Advanced Execution Platform, Orc Trading.
JP Xenakis, head of electronic listed options sales at GSET noted, “In this period of sustained market volatility, clients applying options strategies are faced with an entirely new set of opportunities and challenges. We’ve seen a significant increase in client demand to trade options electronically. We recognized the importance of providing clients with the appropriate algorithmic strategies and trading tools – and enabling them to access these resources from the EMS of their choice.”
GSET has offered electronic options trading for nearly 10 years and executes over 1.2 million US options contracts each day. In addition to the latest options algorithms, clients can take advantage of SIGMA smart routing, four additional algorithmic strategies, connectivity to all seven US options exchanges, and complex order types, including butterflies, straddles, strangles, and custom strategies. GSET also provides execution of global equity options and global options on futures.
Goldman Sachs Execution & Clearing, L.P., through its GSET platform, provides clients with the necessary execution tools and services to manage the investment process from start to finish, from pre-trade analysis to post-trade consulting. Clients access our global offering via REDIPlus and FIX, available for trading global equities, options, futures, foreign exchange and swaps. Customers can seek liquidity using our suite of multi-asset algorithms, route to optimal destinations using SIGMA router and take advantage of one of the largest U.S. crossing networks, SIGMA X.
The Goldman Sachs Group, Inc. is a leading global financial services firm providing investment banking, securities and investment management services to a substantial and diversified client base that includes corporations, financial institutions, governments and high-net-worth individuals. Founded in 1869, the firm is headquartered in New York and maintains offices in London, Frankfurt, Tokyo, Hong Kong and other major financial centers around the world.
