VOLEX Announces Dark Liquidity Auction for Options Traders 

Options traders looking for liquidity and best execution can now tap into the non-displayed markets to get their trades done.

VOLEX Execution Services, a division of Volant Trading, is bringing dark liquidity auctions to traders as the amount of visible liquidity in options trading has decreased so far this year. Traders have been increasingly looking to higher-touch trading methods and higher costs to meet their needs.

According to VOLEX, option traders can trade better than the displayed market, but it requires the ability to tap the exchange-sponsored auctions.

Exchange-sponsored auctions have been around for quite a while – but have been limited in scope to the retail sector and providing them with intra-day price improvement. This flow has never been tapped for institutions.

“Most smart order routers do not accommodate auction sessions for institutional clients,” said Vishal Gupta, head of VOLEX Execution Services. “As spreads continue to widen, traders must adopt more advanced execution services to discover liquidity, electronically and efficiently. Auctions set up an ‘electronic jump ball’ where liquidity providers compete for the order.”

How do the auctions work?

The VOLEX liquidity auction is an entirely automated service. VOLEX secures a contra to the client order to initiate an auction at an exchange. Once the auction is opened, liquidity providers compete for the order, providing size and price improvements. In this way, the auction facilitates competitive bidding to attract liquidity not posted on the displayed market. During the auction, the order can only be traded at the National Best Bid and Offer (NBBO) or better. VOLEX operates under Volant Liquidity LLC, an SEC registered broker dealer, which is part of Volant Trading Group.

VOLEX lLiquidity auctions are available to registered brokers for U.S. listed options. Orders can be sent to VOLEX via the FIX Protocol, the REDIPlus and Bloomberg execution management systems.

Source: Traders Magazine – VOLEX Announces Dark Liquidity Auction for Options Traders

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