TradeWeb Launches FX Options Platform

Electronic market-maker TradeWeb Markets LLC, has introduced a multi-dealer foreign exchange options platform, its fourth derivatives marketplace, it said Thursday.

The firm--owned by Thomson Reuters Corp (TRI) and 10 banks--said the new platform allows options trading in a range of strategies on major currencies and allows investors to request quotes from several dealers simultaneously. The system also offers integrated trade processing and post-trade reporting, which complies with U.S. and European regulations, the firm said.

In both sets of rules, greater transparency in the over-the-counter derivatives market is top of the agenda. Financial institutions and market makers need to establish post-trade processes for derivatives which must then be cleared through a financial warehouse or central counterparty. The rules also state that clients should be allowed to direct a request-for-quote to a number of recipients that they choose.

TradeWeb is most well-known for bond trading. Its new platform is not the first to offer electronically-traded options, but this is a new field. Digital Vega, which is owned by State Street Corp (STT) and Deutsche Boerse AG (DB1.XE), was the first to launch an electronic options platform back in 2010. In the past, many firms were unwilling to invest into such a technologically and strategically challenging area, but the regulatory push for transparency in options trading seems to be changing that.

TradeWeb said seven banks are providing liquidity to the platform, while several other firms are in the process of joining. The market maker currently services 2,000 institutional investors and dealers across its four marketplaces.

-By Alexandra Fletcher, Dow Jones Newswires, 44 20 7842 9462;

alexandra.fletcher@dowjones.com @djfxtrader

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