Market Making

Overview

The Horizon market making software manages all kinds of securities products issued by the bank. These include options, warrants, DeltaOne, barrier products such as CBBCs and also any investment or leverage vehicles (products).

The automatic quoting features are adaptable to any kind of advanced business logic (size quoting and refill, spread, depth quoting). Market making activities are secure to prevent interference from automatons and/or semi-manual quoting.  Anti-arbitrage features like anti spot manipulation or specific spot scheduling are also available. Moreover, market making strategies take market behavior into account via some special fast market features.

Quoting strategies include inbuilt measures to prevent short selling and to manage the remaining stock position. For highly complex products, the external price cache is available to avoid heavy integration tasks to price the product using the user’s libraries. For volatility products, several types of volatilities can be set up pertaining to the specific requirements of the user’s business targets or their bank’s organisation. It is possible to trigger some arbitrage strategies on competitors’ products by monitoring the flow of those products.

Hitter Monitoring

Options market making

When making markets, Horizon’s market making software automatically adapts to the relevant exchange or platform to comply with the corresponding rules. Thanks to predefined platform parameters, different levels of risk are available. Depending on exposure or last executions, the trader has the possibility of setting-up conservative algorithms to withdraw quotes from the market automatically. The default settings include inputting volatility orders or monitoring market opportunities. Managing the volatility is combined with some automation logic to seize opportunities or to avoid arbitrages. Moreover, anti-gaming tools are included in some dedicated risk management strategies for options trading.

Futures and ETF market-making

The Horizon market-making software for DeltaOne fully supports the life cycle of ETF products, from issuance to market-making and the hedging of positions. The same feature is used by futures market-makers who can set their defaults from Horizon’s market-making software or directly from Excel. Issuers or market-makers can quote on multiple depths and manage their spreads to respect the exchange requirements. Once the future or ETF is executed, the system automatically hedges the delta using the pre-defined strategy set out to ensure the market-making strategy is risk free.

Key features

Top benefits

  • Quote or Order market-making
  • Market-making performance monitoring
  • Fixed volatility quoting with manual management
  • Fast execution features for options via mouse, ladder view and algorithmic trading orders
  • Barrier product management (CBBC)
  • OTC trading
  • Full integration with algorithmic trading solutions to customize proprietary trading strategies
  • Excel link for the provision of real time system and market data
  • Integration with Horizon’s algorithmic trading system
  • Customisation of spot computation using variables and validation formulas
  • Optimisation of arbitrage strategies, avoiding arbitrage thanks to the anti-gaming feature
  • Improved market-making strategies with cautious level management and scheduling
  • Compliance with complex exchange spread rules through fast spread adjustment and cautious levels
  • Easy creation of structured products to be issued
  • Manual quotation of illiquid or complex structured products
  • Save on quant costs using Horizon Quant library to price structured products with common models
  • Management and simulation of strategies before starting the automaton
  • Manual or automatic position hedging with customisable behavior
  • Monitoring of real-time P&L and risk