By Wendy Lisney, Derivatives Editor

Fenics Global Options (GO), BGC Partners pioneering electronic trading platform for exchange listed futures and options, is the winner of the Trading and Execution Solution of the Year in FOW’s International Awards 2020.

The fully anonymous and multilateral trading platform enhances the voice brokerage model by connecting participants and intermediaries directly in an electronic environment. It is open to all liquidity providers, global banks and non-affiliated third-party brokers.

Key to the development of Fenics GO was a derivatives trading model that had remained the same since the London International Financial Futures and Options Exchange, now ICE Futures Europe, and Marché à Terme International de France, now Euronext Paris, moved to an electronic environment in the late 1990s.

“For more than 20 years, the way to trade the market did not change,” said Jean Pierre Aubin, co-global head of brokerage at BGC, “so we decided to create Fenics GO.”

Fenics GO was launched in the third quarter of 2019 in collaboration with market-makers Optiver, IMC and Maven Securities.

The platform enables users to access liquidity without disclosing identity, size, or direction to the market. Multiple protocols offer a choice between providing a price during the request-for-stream stage or joining the volume clearing session after a price has matched.

“BGC has always been strong in its electronic business,” said Aubin, recalling the sale of its US Treasury notes and bond platform eSpeed to Nasdaq in 2013 and commodities platform Trayport to Intercontinental Exchange in 2015.

“Today we have multiple electronic platforms under the Fenics umbrella and Fenics GO is one of these. Its technology is unique.”

Fenics Go saw a gap in the market to modernise global options to electronically capture the over-the-counter (OTC) business, particularly where orders are too big or complex to be displayed on the native screen of an exchange.

“Above a certain block size, any member is able to look for a counterparty,” Aubin said. “If you look across all the exchanges, they do have a common pattern. Even in an electronic environment, some of the business remains OTC.

“Fenics GO electronically captures what was an OTC business before. We’re not in competition with the exchange because every trade is automatically crossed with these exchanges, so we are partners as well.”

Other features include Application Programming Interface connectivity which allows users to stream quotes and prices, a reduced tick size offering the ability to quote in tighter spreads, and straight-through-processing (STP) for transactions to the exchange including time stamps for full transparency of order flow.

At its launch, the platform offered Eurex-listed Euro Stoxx 50 Index Options and related Delta 1 products. Since then, Euro Stoxx options front months have reached a market share of almost 10% supported by five partners: IMC, Maven Securities, Optiver, Susquehanna and Citadel Securities which joined the platform in January last year.

Fenics GO’s coverage has also expanded to Nikkei options and futures on the Osaka Securities Exchange and Singapore Exchange, where it has up to 20% market share of front months the block trade market and four partners:  IMC, Maven Securities, Lighthouse Financial Technologies and Optiver.

The platform also offers products linked to the Hang Seng Composite Index tracking the top 95th percentile of the total market capitalisation of companies listed on the Stock Exchange of Hong Kong, and will soon offer the DAX Performance Index covering the 30 top German companies trading on the Frankfurt Stock Exchange.

In 2020, around 4.5 million Euro Stoxx options with a notional value of over $80 billion were arranged on Fenics GO. For Nikkei, over 320,000 options with a notional value of over $35 billion were arranged since the launch in February 2020.

Aubin highlighted that BGC remains the derivatives equity leader in voice business, and that its goal is to enhance the current voice brokerage model to offer a wider choice to options traders.

“Let’s step in the shoes of a trader for a minute,” he said. “Compared to voice, when you trade Fenics GO you have an instant, clear visibility on what you’re doing, especially on the vanilla products.”

Contact details:

For more information, contact: FenicsGoDesk@fenics.com

Website: https://www.fenicsgo.com