Quantum5 Plots Real-Time Options Execution Analysis
October 29, 2007
Published in the Wall Street Letter
Quantum5, an Austin-based analytics company, is planning to launch a real-time options order flow analysis and exception reporting as the options industry begins to track best execution. The Securities and Exchange Commission has been planning to require firms to analyze their order routing and execution and display those results for comparison, while the Securities Industry and Financial Markets Association has been planning to come up with an industry standard for such reporting (WSL, 10/15).
Already, there is a demand from individual firms, said Rod Taylor, v.p. of business development and sales. "We are very much in the discovery period in how to manage best execution for options. Effective/ quoted spread is the preeminent statisitic in equities, but it isn't necessarily the best measure for options. We are soliciting input from our clients to come up with the most responsible measure," he said. Analyzing real-time flow would allow traders to make more efficient routing decisions, but processing enormous amounts of data makes the offering expensive for smaller firms at this time. The company is working on technology to make it more cost effective for smaller firms, Taylor said.
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