Exclusive Online Only ContentBallista Options ATS Goes Live
November 10, 2008
New York-based Ballista Securities announced today that its equity options platform for block trades and delta-neutral orders is up and running.
The alternative trading system (ATS) launched Oct. 27, according to Ballista, with a client base of hedge funds, proprietary trading firms, market makers and other liquidity providers seeking to move large orders. The privately held platform operator, which was founded in early 2007 and received approval from the Financial Industry Regulatory Authority in August, expects to expand rapidly, adding customers and liquidity.
Ballista CEO Robert Newhouse said that while the platform is serving the options space, “we do not consider the options exchanges competition. Those exchanges are benefactors of our business because we leverage the exchanges themselves in order to put our trades on the tape.” Added Newhouse, “In effect what we’re doing is acting as a middleman. We are disintermediating any of the current middlemen that exist,” such as larger institutional brokers that “play the role of putting two customers together. We now believe that business can be done automatically through Ballista.”
Newhouse, who was previously CTO of Torc Financial, a New York-based provider of trading technology, said that “ATS status accurately reflects our offering--a neutral venue designed to evolve the institutional options trading experience.” Ballista touts itself as the first ATS in the sector and aims to provide an alternative to traditional liquidity sourcing methods such as phone calls, e-mails and instant messages.
The platform offers a rules-based forum for buy- and sell-side firms to find block-sized directional option and delta-neutral orders, says Ballista. A user looking for liquidity can submit an order for a timed auction of up to five minutes; if there is an unexecuted portion of the order at the end of the action phase, a direct negotiation will be initiated between counterparties, while preserving anonymity.
Ballista was built to “de-fragment the options market by offering access to multiple execution venues, and at the same time aggregate passive liquidity by bringing market participants into our system so they can actually have a formal place to post their interest to trade,” said Newhouse prior to the platform’s launch (Securities Industry News, May 5).
Keith Landsberg, Ballista’s EVP of business development and former vice president of options at the American Stock Exchange--recently acquired by NYSE Euronext--noted that the firm “has been very pleased by the reactions of the options exchanges,” particularly the International Securities Exchange and Chicago Board Options Exchange, “each of whom has been very receptive to our needs and those of our customers. We are pleased to see them offer the electronic crossing mechanisms that make us a powerful ally in the fight to bring more listed options volume back to the exchanges.”
