Tradeweb Markets LLC, a leader in building and operating financial markets, today announced the addition of European equity futures to its multi-dealer-to-client equity derivatives platform. The new functionality streamlines the current phone-based, over- the-counter trading experience for block trades. By using the platform, institutional investors can put dealers into competition before the trades are submitted to the major derivatives exchanges for final pricing, clearing, and settlement.
This enhancement complements the existing equity options offering, allowing clients to negotiate futures trades on the universe of European-based equity indices, sector indices and single stocks on Tradeweb. The new functionality provides faster transaction times, better price discovery, and more efficient access to third-party technologies, such as order management systems and derivatives exchanges.
This is Tradeweb’s first foray into delta one products, which are synthetic instruments that move in the same direction and at the same speed as the underlying, and are commonly used to achieve low-cost exposure to a stock or index.
“Equity futures are a valuable enhancement for many of our clients that trade synthetic equity,” said Adriano Pace, Tradeweb’s director of equity derivatives markets. “We plan to further expand the range of delta one products available on the platform.”
On Tradeweb, clients put up to five dealers in competition through a request-for-quote (RFQ) trading protocol, achieving improved price discovery and best execution reporting, including a permanent audit trail for compliance purposes.
“A typical equity derivatives auction often takes more time than it does with other instruments, but clients like to have more certainty and structure to the process,” Pace said. “That’s why we designed an electronic marketplace that would provide a faster auction, in which clients receive responses from dealers within five minutes.”
There are 12 dealers currently providing liquidity to the platform across all listed and “flex” futures on all eligible European exchanges, and clients can trade using outright or calendar spread strategies. The platform also supports delta working and delta exchange requests with the addition of risk pricing, live, executable prices that embed all market risk, planned for later this year.
Tradeweb launched its equity derivatives marketplace in 2010 in response to demand from market participants for an electronic solution that provides increased transparency and efficiency in equity derivatives trading.
