Citi will give its institutional customers direct access to its smart-order router for options trading. It already offers electronic direct access to the technology to its broker-dealer customers.
The move will make it possible for do-it-yourself options traders on the buyside to access the markets through Citi. “We use our smart router to split and spray orders across multiple exchanges,” explained Kevin Murphy, Citi’s head of U.S. option electronic execution. Murphy was previously in charge of broker-dealer sales, the group that provided Citi’s smart-order router to retail brokers. Citi’s routing service is separate and distinct from Citi’s trading desk, which offers buyside traders high-touch handling of their orders, including capital commitment.
The low-touch routing service offers lower commissions, Murphy said. Trade sizes can go up into the thousands of lots, especially in the more liquid options contracts, he added. As part of the routing service, Citi offers a proprietary methodology for sending orders to the exchanges’ price-improvement auctions. In these auctions, orders may get filled at better than the national best bid or offer. Buyside traders can use any front-end trading system of their choice to connect to Citi’s platform. Those include TradingScreen, Bloomberg EMSX, RealTick, FlexTrader and ConvergEx’s Eze OMS.
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