In 2020, we at SpiderRock began a journey to offer advanced order routing and low-touch execution services for the institutional options trading community. The vision was to deliver a market scale system that would provide broad and agnostic market access for all options market participants. Today, we are happy to announce that this stage of our evolution has become a reality with the release of SpiderRock Connect, the next-generation SpiderRock platform.

This redesigned trading system significantly expands our services to a broader set of institutional clients and offers a competitive alternative to the opaque traditional liquidity access channels. Asset managers, ETF issuers, insurance companies, and retail brokers are mostly blind to the price discovery process and rely on a few large liquidity providers to trade against their flow. Finding counterparties for large orders can be laborious, slow, and complicated. While much of the trading industry has increasingly embraced automation via low-touch execution, a large portion of institutional clients still rely heavily on instant messages and a desk-to-desk ‘call around’ methodology. As such, and as part of SpiderRock Connect, we have formally launched an entirely new equity options alternative trading system called SpiderRock ATS, which automates the immediate execution of orders via Flash Auctions and the process of negotiating larger orders via our Block Auction feature. This new trading network is open to all institutional market participants and brings much-needed efficiency, transparency, and competition back to the options markets.

As Chief Revenue Officer, a considerable part of my job is to consult with clients to determine where and how we can expand and enrich our technology offerings to best help them achieve their trading objectives. Consistent feedback was that clients prefer to reduce the number of providers they use to trade and manage risk globally and automate as much as they can. The high level of consolidation amongst market makers along with a general lack of technological innovation in the ways to access the market have fueled a vacuum of competition, leaving an expanding option participant community with fewer alternatives.

SpiderRock is strategically and technologically uniquely positioned to fill that gap. We are one of the only independent and agnostic agency-only, execution providers where orders are never internalized. Clients can now lean on our trading network to have their orders fairly represented. Guided by a robust analytical framework for price discovery, clients using SpiderRock ATS can access a wide pool of liquidity providers who were not previously able to interact with their order flow.

To conclude, the path to automation is hard to achieve. It takes extensive expertise in building technology trading solutions and a deep understanding of market structure and its continual evolution. SpiderRock has spent over 15 years calibrating trading solutions for the most sophisticated traders in the industry. We have now enhanced our powerful analytical, risk, and routing back end to support auction-style trading in listed and FLEX options. We have developed a new front-end that provides an easy and effective access point to both on-and off-screen liquidity to trade single and multi-leg options orders as well as risk-constraint basket of orders in the U.S. and soon in Europe. We will tackle the Asian derivatives markets next. At SpiderRock, we take great pride in continuing to push the pace and believe that this effort will pay great dividends for our clients.

Before I sign off a special thank you to SpiderRock development, client support, and enterprise operations teams for seeing this from the whiteboard to countless hours of development, and testing, to finally create an elegant and intuitive trading solution. In creating SpiderRock Connect and our options ATS, we endeavored to make the options market competitive once again.

Sincerely,

Annabelle Baldwin

Chief Revenue Officer, SpiderRock 

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