Goldman Sachs Electronic Trading (GSET) has added new features to its US listed options offering, including three new algorithms and the ability to auto-hedge options orders.
The addition of the new algorithms – Pegging, Volatility Limit and Strike – takes GSET’s total number of options trading strategies to seven. The Volatility Limit algorithm takes into account the user’s assumptions on volatility, interest rates and dividends when monitoring the market and sweeping liquidity. Strike offers market sweeping, pegging, stealth and discretion in one algorithm. Pegging allows the users to peg all or a portion of an order to the bid or offer.
The auto-hedge function can be applied to any of GSET’s options algorithms and will enable clients to automatically execute equity hedges in real time as the option order is filled. The function will execute the hedges using the GSET’s equity algorithms and will interact with SIGMA X, the firm’s US dark pool.
GSET’s US options suite is available through the firm’s proprietary REDIPlus execution management system (EMS) or systems from third-party providers, including Derivix, Bloomberg EMSX and Orc Trading.
“In this period of sustained market volatility, clients applying options strategies are faced with an entirely new set of opportunities and challenges,” said JP Xenakis, head of electronic listed options sales at GSET, in a statement. “We’ve seen a significant increase in client demand to trade options electronically. We recognised the importance of providing clients with the appropriate algorithmic strategies and trading tools – and enabling them to access these resources from the EMS of their choice.”