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October 1, 2012

Navigating the Noise

MEB and ISE Join to Help Traders with Multi-Leg Trades

By Peter Chapman

MEB Options, an institutional brokerage based in Chicago, has joined forces with the International Securities Exchange to provide a service that helps traders locate the various legs in their multi-leg trades.

Developed by MEB, the service is called "Spread Crawler." It scans the complex order books of six exchanges: NYSE Amex, NYSE Arca, the Chicago Board Options Exchange, C2, ISE, and Nasdaq OMX Phlx. The object is to locate quotes appropriate for the trader. Because there are a lot of unhelpful orders on these books, it can be time-consuming for traders to sift through them, according to Jason Stamer, a manager in MEB's business development department.

"This manages the market data for the complex order books out there," Stamer explained. The subscription service went live in September and is being managed and marketed by ISE. Users log onto the service on ISE's Web site, fill out a trading wish list, and then wait for an instant message with quotes. Once they receive the data, they can then trade where they choose. They don't have to trade with MEB or at the ISE. Spread Crawler is strictly an information service. It is not trading technology. MEB customers have been using it for the past three years. The ISE will market the service to its customers and handle the billing.

"We thought this would be a fantastic way to grow the pie of complex orders by giving more people the ability to filter the information," said Boris Ilyevsky, managing director of ISE Options Exchange, "and enhance our presence and relationships with our customers." ISE has one of the largest complex order books among the exchanges, routinely trading 40 percent of its volume on the book, Ilyevsky said.

Complex, or multi-leg, orders have been one of the fastest-growing sectors of the options business in recent years, according to industry sources.

 

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