Options data is complex and multifaceted. Good options market data can make the difference between strong, profitable strategies and the rest of the pack. Your choice of data partner should be driven by a clear understanding of your organization’s specific needs and objectives.  

This blog post is the first part of a five-part series that will detail what factors you need to consider when selecting an options data partner.  

Tailoring Data Products to Your Strategy 

Different trading strategies demand different types of options data. Whether you’re an options trader, an equity hedge fund manager, or a proprietary trading firm, your data needs will be unique.  

Your data partner should offer customizable solutions that align with your specific requirements. Options traders may require real-time tick data and historical data for rapid decision-making, while long-term investors may prioritize end-of-day data for research purposes. 

Raw vs. Normalized Data Feeds 

Raw data feeds provide essential market information directly from exchanges or reporting authorities. However, managing raw data feeds can be challenging due to their bandwidth requirements. A high-quality normalized feed offers a more manageable solution by condensing essential data elements.  

Look for normalized feeds that include implied volatility, theoretical surface prices, and synchronized underlying price data to support accurate modeling and risk management. 

Importance of Options Analytics 

Access to quality analytics is paramount for successful options trading. Your data partner should integrate live market data with comprehensive analytics to provide a holistic view of the market. Quality analytics, including well-fit surfaces, can make a significant difference in the options data provided by different providers.  

Ensure that your data partner offers reliable analytics backed by high-quality reference data, such as earnings, dividends, rates, and corporate actions. 

Historical Data for Strategy Development 

Historical data is invaluable for back testing trading strategies and refining models. Your data partner should offer deep end-of-day historical data to support rigorous strategy development and testing. Additionally, intraday snapshots can be essential for analyzing intraday volatility strategies and understanding market movements. 

Conclusion: Partnering for Success 

Choosing the right options data partner is a critical decision that can impact your trading success. Look for a partner with deep options experience, a comprehensive understanding of your unique needs, and a commitment to providing high-quality data and analytics.  

With the right partner by your side, you can navigate the complexities of options trading with confidence and achieve your investment goals. 

About SpiderRock Gateway Technologies  

SpiderRock Gateway Technologies (“SpiderRock”) is the data and analytics division of SpiderRock Technology Solutions, a provider of industry-leading options trading solutions. SpiderRock is an exchange-licensed redistributor of market data, providing US stocks, options, and futures market data in a raw and normalized format. SpiderRock’s proprietary live analytics offer low-cost delivery of market data and options analytics without requiring clients to make a significant investment in infrastructure.   

For more information, please visit www.spiderrock.net/data, follow us on Twitter at @SpiderRockChi, and visit our LinkedIn Page. 

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