Egar adds options component to equity derivatives suite

Egar Technology, the New York-based supplier of trading and risk management systems, whose best-known client is Canada's CIBC, has released a real-time equity options trading and risk management service developed for market makers.

Based on Egar’s Equity Trading System (ETS), the offering incorporates functionality specific to market makers, including a theoretical value engine, a volatility manager and a correlation-based analyser for delta and vega hedging. Also included is back-office risk management and analytics support for handheld devices used on trading floors.

“So much more electronic trading is now taking place, especially in Chicago and Philadelphia, that the market makers are familiarising themselves with off-the-floor trading,” Ravi Jain, chief executive of Egar Technology, told RiskNews. “In the next couple of years, if we find the floor has become obsolete because of electronic trading, then these guys can pack-up and move upstairs.”

ETS supports trade entry and real-time market view screens, detailed risk analysis and decision support tools via its proprietary implied volatility data.

According to Jain, Egar technology will announce the names of two new clients shortly – an options market maker on the Philadelphia Stock Exchange and a New York-based market maker with an ‘established’ presence on the American Stock Exchange and International Securities Exchange (ISE).

“We also aim to extend our services to a number of the large investment banks, especially on the electronic market-making side,” said Jain. “Some, like Deutsche Bank, have already developed in-house systems to make markets on the ISE, but there are several that have not, and we are working on introducing our theoretical value and volatility management engines to them.”