MEMO: GSET Launches Auto Equity Hedging For Options
Staff Reports
Firm: Goldman Sachs
What’s New: GSET announced a new automated hedging product for underlying equity issues for all U.S. options algorithmic strategies.
Date: The product officially launched on June 23
Background/Why: The program came about as clients normally would have to manually hedge the underlying equity positions after they place their electronic options trades. Now the equity hedge can be automatically and almost at the same time the options order is placed.
How it Works: According to Vishal Gupta, head of U.S. listed options business development at GSET, once the parent options order is entered, the program automatically buys or sells (hedges) the underlying equity of the option. The equity order is then routed through the broker’s equity smart order router and its crossing network, SIGMA X, to get the fill.