TIP #7: BEING SMART ABOUT COMPLEX OPTION ORDERS
Complex orders, or spreads, continue to grow in popularity. They allow for the simultaneous execution of multiple options, or options combined with an equity or ETF component, rather than managing each leg independently. While executing multiple legs as one order simplifies order management, it does require sophisticated routing capabilities.
Eight options exchanges currently support complex orders. Additional complex order books are on the horizon. This is to be expected given complex order volume has increased significantly over the last few years. Having more venues supporting complex orders creates both opportunities and challenges to market participants.
How do we help you successfully navigate through the challenges? By providing Instinct Options Smart Spreads, our complex order algo. The algo is called Smart Spreads because it:
- Provides access to every exchange complex order book, benefiting from innovative exchange functionality
- Participates in complex auction mechanisms
- Adjusts routing behavior based on executions received
For many clients, it can be a smart, simple way to trade complex orders.
For more tips to help optimize your electronic trading across asset classes, check out the rest of our Trader Insights video series.
This content is not research and was not prepared or reviewed by employees within BofA Merrill Lynch Global Research.