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June 4, 2009

Bloomberg Offers Electronic RFQs for Options

By James Ramage

Bloomberg's buyside customers in the U.S. equities options space can now get quotes without hanging on the telephone. By using a new feature of Bloomberg Tradebook's instant messaging technology, these traders can submit requests for quotes to multiple market makers electronically.

The advantage is that the process of getting quotes-often handled over the phone-is both electronic and anonymous, said Bloomberg's Michael Tobey, who's in charge of developing U.S. options capabilities for Tradebook.

The service enables Bloomberg to compete against the traditional options brokers who take customer RFQs over the phone.

To use the electronic RFQ, a trader enters a request that is routed to a Bloomberg "operation," which is then routed to a number of market makers, Tobey said. The request is routed over Instant Bloomberg-the firm's instant messaging system.

The market makers don't know the identity of the client, Tobey added.

When a number of them respond, the user can then decide if he wants to trade against the quotes he gets back.

Electronic RFQs may be particularly helpful to Bloomberg's smaller customers, Tobey noted. "Under the Bloomberg and Tradebook umbrella, they can go in and anonymously access this liquidity," Tobey said, "which they didn't really have the ability to do before."

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