BGC Invites Rival Brokers to New Electronic Platform for Options

(Bloomberg) -- BGC Partners Inc., the world’s second-biggest interdealer broker, has started an electronic trading platform for futures and options in collaboration with market makers Optiver BV, IMC Trading BV and Maven Securities Holding Ltd.

Brokers from BGC’s fiercest rivals -- TP ICAP Plc and Cie Financiere Tradition SA -- will be able to use the platform, known as Fenics Global Options, according to BGC President Shaun Lynn. The platform is designed for large block trades and will kick off with Euro Stoxx 50 Index options, he said.

“It has taken us years to put this together,’’ Lynn said in an interview. “It’s driven by clients looking for reduced cost, transparency and speed of execution. This platform does all of that with tighter spreads -- and they own a piece.’’

Markets traditionally dominated by over-the-counter deals done directly between two parties, such as fixed income and derivatives, are turning to electronic trading to streamline the process and increase the volume of transactions. In 2018, more than 273 million Euro Stoxx options contracts were traded, according to Eurex data.

Voice Broking

The plan is for the platform to add major global indexes such as the Nikkei 225, as well as other asset classes like fixed-income options, according to Dean Berry, global head of electronic and hybrid markets at Fenics, a unit of BGC. The company announced the new platform in a statement on Wednesday.

Market makers such as Optiver currently field voice calls from brokers requesting prices. That will now take place electronically, saving the brokers time.

“You have voice broking and exchange trading, and the real jewel is somewhere in the middle of that,’’ Berry said. “There will always be a place for voice brokers; it could be that some convert to become electronic traders.’’

The move comes as a smaller upstart firms such as WeMatch Live take aim at the broker market by trying to eliminate middlemen altogether, allowing banks to convene on a platform to match their own trades.

To contact the reporter on this story: Viren Vaghela in London at vvaghela1@bloomberg.net

To contact the editors responsible for this story: Ambereen Choudhury at achoudhury@bloomberg.net, Patrick Henry, Will Hadfield

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