September 2012 -International Securities Exchange and MEB Options Announce Partnership to Introduce Spread Crawler TM
NEW YORK, September 20, 2012 - The International Securities Exchange (ISE) today announced that it has partnered with MEB Options to introduce Spread Crawler TM , a new tool that provides powerful insight through Instant Messaging (IM) into the entire universe of real-time actionable spread orders. This unique product aggregates streaming spread book data from all options exchanges and transmits individual, user-defined spread orders to subscribers via IM. Spread Crawler simplifies the monitoring of live spread book feeds, while displaying spreads that satisfy customized pre-defined parameters.
"Our partnership with MEB Options represents the first step in expanding ISE's product offerings to include a suite of unique trading tools and analytical capabilities," said Gary Katz, President and CEO of ISE. "MEB has developed a simple but powerful user tool that supports this high-growth segment of the options market, and we are extremely gratified that they selected ISE as a partner to expand the reach of this compelling product offering.
"By partnering with ISE, we are able to tap into their sales expertise, front-line user support and marketing reach. These resources will enable Spread Crawler to reach its absolute potential in user base, productivity and service," said Michael Barry, President of MEB Options.
"As spread trading continues to grow as a percentage of industry volume, Spread Crawler will offer subscribers a straightforward way to digest the enormous amount of spread order data produced by the exchanges," said Boris Ilyevsky, Managing Director of ISE's options exchange. "Spread Crawler will give investors accurate data tailored to their custom-set parameters for particular symbols or industry sectors, minimum/maximum sizes, edge and specific expirations."
Spread Crawler is able to transmit messages through industry-standard IM programs such as AOL, MSN, Bloomberg, and Yahoo. It is available to all interested subscribers, including both ISE members and non-members, at the same fee* levels. To learn more about Spread Crawler, visit www.ISE.com/SpreadCrawler.
*Fees for Spread Crawler are subject to SEC approval.
May 2012 - MEB Options introduces unified messaging
MEB Options is pleased to announce that we are in the final stages of implementing “unified messaging” across our organization. We have entered into a long term partnership with AOL to not only provide unlimited access to the AOL network, but ongoing support and maintenance so we are confident we will be able to provide stable, efficient, and high speed messaging to our staff and systems which will translate to improved service and quality to our customers. What this also means is you will have a single ‘name’ to communicate with which will enable you to contact that individual be it via instant messaging or EMAIL using the same name. The first stage of this process will be ready to roll out on May 8th so from that date both the instant messaging name as well as the email address of all of our staff will be the same. Please click here to view a list of these old and new names. .
March 2012 - MEB Options announces AutoTrade at the CBOE Risk Management conference
As an extension to Click to Trade MEB announced the launch of AutoTrade at the CBOE RMC Conference in Bonita Springs Florida. In same way that "Click to Trade" scans the electronic markets and will pick out spreads based on your selection criteria. Auto Trade will then automatically attempt execution of this spread without the need of human intervention. Execution are then reported to the customer via EMAIL and part of our daily blotters. Additionally customers can specify 'Report Only' mode so Auto Trade will go through all the motions, but rather than actually executing the trade will just report it to the customer so they can ensure it is making correct decisions.
May 2011 - Options Industry Growing the Pie
On Friday May 13th at the Options Industry Conference, Kevin Murphy of Citigroup served as the moderator for Growing the Pie, a panel discussion on growing the options marketplace by exploring its changes and looking at the drivers to fuel growth in the next decade.
Panelists included Paul Britton (Capstone), Zern Sternberg (Lake Hill Capital Management), Jim Seligman (MEB Options) and Henry Schwartz (Trade Alert LLC).
Murphy started the panel with a historical look at the options market, reviewing its past growth drivers including floor market makers (1970s), retail brokers (1980s), retail investors (1990s), institutional investors, specifically hedge funds (2000s) and more recently, electronic traders and traditional money manager relooking at options. He noted the options marketplace has a 25 percent compound annual growth rate.
What are the key drivers for growth?
The industry needs to focus on education. Speaking from the perspective of running a hedge fund (Britton), greater education on the institutional side could double or triple assets; this would benefit everyone and increase trading.
Education is where capital comes from whether its pension or large institutional investors. By educating the pension community, it can grow the pie; by convincing large investors to invest in options, it will have great value to the industry.
Murphy brought up the operational side of trading: the custodian side, escrow receipts. It’s not a simple process to handle and asked, is this a challenge affecting growth?
If you go to large institutions, options is a swear word. Back office people see options as complicated and dangerous. Again, it comes down to education (Britton).
Technology…Changing the way people trade
Yes, technology is a change agent for the way people trade; market makers have left the floor.
On the buy side, it’s a requirement to have great technology. This grows a piece of the pie with its liquidity and these traders can do more trading. You can execute a trade with prices that have zero transaction costs to them (Sternberg).
But with technology and innovation, any end user requires a major technology investment.
Differentiating the Prop/High Frequency Trader
As end users, we buy and sell risk when we want. If we want to transact a few 1,000 contracts, a machine parses them up with the best price.
Does this mean you’re a frequent trader? By using technology as access, it minimizes costs but it’s also time for the market maker business to get paid for liquidity; we are end users and a liquidity source.
With advanced technology, we see transactions that couldn't be executed in the past. These cost less and again, a major technology investment is necessary if you’re going to be in the options market (Seligman).
Back in the day, your relationships gave you access to information with just a phone call. It was an advantage and depending on who you knew, you could get faster information. You had an edge.
Today, there’s too much information and you have to sort through a myriad of it.
How do you do it?
With fragmentation and automation, it is hard to know what’s going on. You need tools to dig through the information and then determine what to do with it. Decide what information is important and what data is intelligence by data mining it.
It can be costly and it is daunting on a small scale, but you’ll get trading ideas and help serve your customers (Schwartz).
Yes the markets have changed but floor brokers still have a necessary personal touch, especially with VIX and SPX which are not automated. They do serve a purpose and really, customers aren’t used to electronics; however, it helps them find price and liquidity.
It also provides eyes and ears (Seligman).
Now working upstairs with customers who hedge tail risk, it makes them comfortable to have risk management but again, people don’t understand it and want risk protection for free and an insurance policy.
Without this, people lose money and premium. Again it goes back to an education need (Britton).
Also, with floor traders moving upstairs, there are tighter markets but not enough of an edge. We’re also seeing a migration by people to trade other markets.
By making markets too efficient, is it hurting growth?
Efficient markets make it easier to transact trades and now the classic definition of market maker is not valid anymore. With just buying and selling, they’re flat; it’s difficult.
But the pie is growing from these positives: an ability to manage risk, tremendous liquidity, zero transaction costs and the implementation of new strategies.
We can buy and sell a portfolio at little cost. We can get in, and get out.
Electronic trading provides speed but more importantly, speed or the analytics for options gathering is expensive. Upfront you have to spend a lot of money, followed by additional costs for upgrades.
But really, the market is driven by end users, sales people (Seligman).
With trading high frequency (these are the exchanges), people need to know what’s going on. Most people in the business are smart and make up little value of not being first so there’s they need to look at real-time data.
But you have to ask, what’s the latency and does your brain know the difference?
This is an interesting challenge and if you step back, you don’t have to be first.
What is going to grow the pie is innovation and helping people with the markets. There’s also value in analytics.
Value of Crossing Assets With the VIX, other asset classes have entered the options marketplace. There’s growth from South America, China and commodity ETFs, which is bringing lots of arb opportunities.
Businesses recognize this.
The futures business is growing well organically and now they look interesting. Finding a niche where their value is, is important.
In addition, there are new market entrants but we’re just waiting for a larger event to happen. The world is more volatile.
The flash crash had no explanations and it turns people off. Limits need to be put in place and one option is limit up, limit down.
The Flash Crash: What happened?
Some say it was caused by market makers and specialists being undermined over the years, having less incentive to maintain the markets.
Panelists agreed, saying this has happened since trading firms became public businesses as their long-term fills are now gone and it’s more transactional. The days of eating a trade is gone (Seligman).
There’s also shrinkage, a deleveraging of risk capital. This is producing a lot of anxiety and last May it couldn’t be traded. There’s a transition from bank balance sheets to assets (Britton).
When does the light bulb go off for institutions to enter the market?
It goes back to the same old things: how good you are, how good your technology is, and how much money you make (Sternberg).
And that was the gist of this panel. There were recurring themes of technology, education, information and risk. I am sure next year will be as lively a conversation and opinions will ensue.
May 2011 - QCC Makes Inroads
Can a savvy customer buying one raincoat get the same price as a Bloomingdale's buyer who purchases thousands of jackets wholesale?
Of course not. Similarly, large contingent trades are negotiated in the wholesale equivalent of financial markets, between sophisticated professionals who understand the market dynamics and how to obtain the best price. And given the often multiple and interdependent components of such transactions, many would prefer their blocks to be executed without competing bids and offers potentially breaking them up. Just as wholesale buyers or sellers of consumer products want their orders to arrive intact, and without others suddenly butting in. But what if competing bids or offers lower the overall price?
The International Securities Exchange launched its qualified contingent cross (QCC) Feb. 28 to enable market participants trading large block combinations of options and stocks to match orders without the market-maker interference that has dogged the electronic exchanges. And, anecdotally at least, the order type seems to be working, although some market participants believe institutional investors will ultimately lose out.
“Our business at the ISE has picked up with the introduction of the QCC,” said Jeff Mehan, president of the TFS Derivatives unit of Financiere Tradition S.A., known as Tradition, an inter-dealer broker that matches counterparties for large transactions often comprising securities and derivatives legs.
“We've used it a number of times, and it's worked out pretty well for us,” said Jason Stamer, director of business development at Chicago-based MEB Options, which operates an upstairs trading desk and has floor brokers at three exchanges.
The ISE, which has yet to disclose QCC volume, first received regulatory approval for the QCC in August 2009. But a storm of criticism from rival exchanges and market makers prompted the U.S. Securities and Exchange Commission to seek more input before finally approving it in late February.
New York-based ISE argued that large contingent orders already being executed on exchange floors faced few or no competing bids from the dwindling number of floor traders. That put the ISE, a subsidiary of Eurex, and other fully electronic exchanges at a disadvantage, because their crosses exposed the orders to all their market makers and were thus more likely to be broken up.
The ISE's argument won out, and the QCC represents the first regulator-approved instance of completely dark liquidity in the options market. Previously, all options orders were displayed on an exchange, allowing market participants and especially market makers to put up bids or offers and improve the price. Market makers are a key constituency in the options market because unlike stocks, where there is a single continuous price, each options class has many illiquid series that require dedicated liquidity providers.
March 2011 - MEB Launches IM Trading
Instant messaging has swept through the trading world in recent years as trading desks embrace the ultra-quick system of information exchange. MEB Options, an institutional commissioned broker based in Chicago, will capitalize on this with its new offering, Click-To-Trade, which was launched at the 27th annual CBOE Risk Management Conference.
Click-To-Trade will relay option trades to traders via instant message, be it Jabber, AOL or any other client or protocol. No additional software needs to be installed on a computer, which is helpful for traders behind strict corporate firewalls.
“This is a good product for the order gatherer who values price improvement. This gets showed to 500 people or more compared to a pit from yesteryear with 20 guys in it. And about a fifth of the people it's shown to will show interest,” J. Todd Weingart, senior vice president at MEB Options, told Markets Media. MEB has no particular group of traders it is focusing on. Institutional and proprietary traders are expected to take advantage of the product from the start. “We're into institutional, proprietary traders. The reason they'll use us is because they like the illiquid stocks that no one sees because no one shows it to them,” said Weingart. “They tend to pick the stuff that no one trades or someone will be calling them. We'll also deal with market maker groups because we're bringing ideas to them for them to trade.” Traders who don't want a deluge of messages can use MEB's filters to narrow down trades into several categories, including indices ETFs, contract size, underlying symbols, penny width options and expiration. Algorithmic traders can automatically take MEB's ideas and work with them thanks to support for FIX messaging. “With an algo program, you can open the floodgates to all the stocks you're interested in,” said Weingart. “A computer can analyze the data and make a trading decision faster than an individual. Instead of just looking at one level of trades, the computer will see all kinds of things it can trade and will do it.”
February 2011 - MEB Options migrates to ABN Amro
We are proud to say that we are happily in the process of migrating our securities and futures clearing to ABN Amro. Our objective is to provide the best service to our customers, and we think that through our new arrangement, we will be better equipped to service our customers
October 2010 - Creation of our Structured Product - OTC Derivatives - FLEX desk
MEB Options has recently created a structured product desk for the benefit of our current and prospective customers. As the trading landscape changes, we aim to be first in line to offer new products and trading opportunities. Traders and insurance companies aim to relieve their counterparty risk and we find them coming to us more often to price these exotic options on a listed market.
December 2009 - Spot On Brokerage Services unites with MEB Options
It is our pleasure to announce that we have joined forces with Spot On Brokerage Services and expanded our reach into index futures and options. Spot On has more than 30 brokers and clerks whom all have outstanding knowledge and experience on the CBOE and CME floors. The Spot On division handles most of our SPX, NDX, RUT, VIX, IWM and ETF business and continues to grow in the futures space.Futures products are offered through MEB Futures, LLC - Member, National Futures Association.
May 2009 - MEB Options Inc Restructured
MEB Options Inc has completed its restructuring to MEB Options LLC.
May 2009 - MEB Options LLC New State of the Art Trading Facility
The construction of MEB Options new state of the art trading facility has just been completed on the Floor of the Chicago Board Options Exchange. This prime on–floor real estate was completed in May also. It ensures MEBs commitment to its transparent floor based execution model.
May 2007 - MEB Adds SPX Arm
In an effort to better serve our clients, MEB Options is proud to announce the addition of its own S&P 500 Index operation. With the increasing need to manage market risk and portfolio management always a paramount concern for money managers, the CBOE experienced record volume levels for SPX options in March. It was with a focus toward the future of our clients that this commitment was made.
The operation will be spearheaded by Robert Pickert. Rob brings more than 20 years of both equity and index experience to the SPX pit.
We welcome the opportunity to better serve your index needs. We will offer both quality execution and commission rates that you will find to be more than competitive. At your convenience both of our SPX representatives will be available to discuss how they can help you. Please contact the MEB floor staff for additional information.
March 2007 - MEB Executes First CBSX trade
MEB Options executed the initial trade on the CBSX's first day of trading. The CBSX is the CBOE's foray into stock market execution. Today's trading began with 12 stocks and will eventually grow into 2800 of the most actively traded issues.
Stock options involve risks and are not suitable for all investors.