Horizon extends warrants & structured products functionality as issuer demands increase
Horizon Software, the leading global technology provider for electronic trading and investment management, today announced a new version of its trading platform which extends functionality for electronic trading and market making of all listed structured products, such as warrants, CBBCs (barrier products) and ETFs (Exchange Traded Funds).
The new version allows traders to further customize trading strategies and has an advanced user interface. New functionality includes an improved external price cash module, which integrates with the issuers’ quant engines, along with enhanced compliance capabilities, such as real-time market making monitoring for warrants and options. This helps traders to meet ever-increasing regulatory demands which include an audit trail of all pricing and automated trading data, enabling institutions to explain to regulators their market behavior; information can also be provided to exchanges, as they increase their focus on and monitoring of the spreads and trade sizes offered by market makers.
“New participants are starting to enter the market in retail structured products. Until recently this was considered unprofitable, largely because of high marketing costs. However, this market is now becoming attractive for banks which are looking for a steady income,” Adrien Mastronardi, North Asia Sales Director at Horizon, commented. “The marketing costs have come down significantly, thanks to a much better understanding of the drives of the warrants market. Horizon is also playing its part in bringing down costs by automating a range of manual tasks and introducing easy scalability for higher volumes. The cost of integration with external pricers is also reduced thanks to an easier workflow within the platform.”
“In the last year or so we’ve seen increasing interest in warrants businesses not only from Asia but also in Europe, especially from Germany, Switzerland and the Nordics. We have therefore put a lot of R&D effort into enhancing our warrant trading capabilities,” Guillaume Poitevin, EMEA Sales Director at Horizon, commented. “We have made significant improvements to the user interface, for example by providing real-time status and pricing information and using treemaps to indicate whether there’s an issue with a particular instrument.” He adds: “The algorithmic framework embedded in the platform empowers clients to customize hedging strategies and automate the market making workflow.”
Mastronardi adds: “In the last few months the volatility of China’s markets has impacted trading in Hong Kong, and led to investors choosing warrants, in order to avoid knockout options products, which are being outperformed by barrier products. Horizon’s new platform version embeds the Active Quoting rules for the Hong Kong Stock Exchange on warrants and barrier products, so traders can see in real-time if they are complying with the exchange rules for market making and can immediately fix any anomalies.”