Bank of America Merrill Lynch has added four new US options algorithms to its electronic trading platform to complement its existing options and stock specific strategies. The algos are designed for both institutional equity and options traders and broker-dealers.
The four new strategies are named Clean Sweep, Hidden Sweep, Iceberg and NBBO Sweep. Clean Sweep exhausts hidden and displayed liquidity and then posts any residual amount on exchange. Hidden Sweep sweeps the market when the order is marketable but does not post the residual amount.
Iceberg is a synthetic reserve order that allows traders to designate how much of the order should be displayed when posting to the market. NBBO Sweep selects an exchange based on the national best bid and offer. The order will shift to a sweep strategy based on the displayed liquidity available.
“We developed these options algorithms in response to client requests for additional flexibility to dynamically interact with available liquidity, as well as to navigate sophisticated exchange market structure,” said Jon Werts, head of broker-dealer execution services at Bank of America Merrill Lynch. “Developing these strategies helps our clients stay ahead in this rapidly evolving market segment.”
The new options algorithms are available directly from InstaQuote and ML X-Trade, Bank of America Merrill Lynch’s proprietary trading front-ends, the firm’s proprietary FIX application programming interface, or third party trading systems including Bloomberg, BNY ConvergEx’s Eze order management system, Derivix and Townsend Analytics’ RealTick execution management system.