According to a new Impact Report from Aite Group, 2007 will be a watershed year for the U.S. equity options landscape. Structural and regulatory changes, combined with hedge fund and institutional capital flows into strategies that utilise exchange-traded options, are driving unprecedented levels of volume growth in the marketplace.
As these changes impact the options market, the technologies required to access options trading platforms have become increasingly sophisticated. The result is an entirely new type of smart routing and an algorithmic approach to accessing liquidity in the options market, both of which are capable of handling the increased volumes and are on par with the technologies used in the other marketplaces.
"As the popularity of equity options continues to grow and the technology catches up with that of other markets, structural change has become inevitable," says Brad Bailey, senior analyst and author of the report. "The trading of options has changed dramatically during the last several years, and in many ways, this has just been a dress rehearsal for things to come."