Market maker, Optiver, and derivatives exchange CME Group have set out plans to launch block trading on Nasdaq E-mini options in a bid to help institutional investors manage risk during heightened market volatility.
The development follows CME Group’s decision to make the E-mini Nasdaq-100 futures (NQ) eligible for block trading.
Through the collaboration with Optiver, the market maker will offer direct liquidity in NQ options blocks via electronic execution during an extended 23-hour trading day at CME. The offering will go live from 24 January.
Optiver said enabling investors to use block trades, privately negotiated transactions, would help them to better manage risk during heightened market volatility by executing large trades quickly at one price.
“At Optiver, we support access to liquidity and real-time price discovery for all market participants. With the technology sector in focus, institutions need an efficient way to hedge and manage their risks,” said chief executive of Optiver US, Rutger Brinkhuis.
“The ability to transact large orders at speed through NQ options blocks is a welcome development. Building upon our lengthy track record of block trading across multiple asset classes, we look forward to providing pricing on NQ blocks for institutional parties.”
In addition to the NQ blocks, CME offers block trading in options on E-mini S&P 500 (ES) and E-mini Russell 2000 (RTY).
Several other exchange operators have bolstered their block trading offerings in the last few months as demand increases including Cboe which combined its MATCHNow and BIDS Trading platforms to create a Canada-based block trading offering, Cboe Lis.