DrKW’s Piranha bites into online options services

Following a period of beta-testing with selected counterparties, the new options product is now on general release to existing Piranha clients globally, said Matthew Riley, a DrKW vice-president in e-FX institutional sales in London.

This is the German bank's first online FX options offering for clients. Prior to this, all of the bank’s options business was conducted over the phone. As with existing Piranha services for spot, forwards and swaps trading, clients can access the new offering from the same entry screen.

The service enables clients to place online orders for vanilla options and first-generation exotics in real-time, 24 hours a day. Vanilla options execution is automatic, but first-generation exotics trading, which is a more complicated process, requires the use of interactive trading, where a chat screen aids execution. Clients can also access structured products, trading ideas and research designed specifically for the options market.

DrKW had an initial target of 100 clients using the options system by year-end, but now expects to exceed this due to significant existing client demand, Riley claimed. "Online trading volumes have grown substantially, leading us to be confident in the success of the product with new counterparties," he added.

DrKW said there are no plans to launch any more product initiatives on Piranha in the near future.

Launched three years ago, the Piranha system was one of the pioneer e-trading systems for foreign exchange, and now sees growth in volumes of some 50% year-on-year, the bank said. DrKW’s online options service competes with existing single-bank offerings, including those from UBS Warburg, Deutsche Bank and Goldman Sachs.