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Jersey Boy 842 days ago
I am on both sides of this issue. In many ways, dark pools already exist in the options market. I can pick up a phone and have my broker shop my order through a variety of non-displayed liquidity right now.
On the other hand, this is going to fragment the market further, something that I do not relish. It is already hard enough to do size in the options world these days without having to deal with multiple dark pools just to get your order filled.
Your thoughts...?
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Tic Tac 837 days ago
Hell no!!!
Seriously, I'm still learning what dark pools are, so I have no idea. It just sounded good.
If these guys can give me other places to trade options aside from the exchange monopolies, then I'm all for them. Bring on the competition!!
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Athos 832 days ago
You are a crazy man, Tic.
Just listened to Podcast #18 and I agree with Scott Morris from the BOX. I think these dark pools are just a transitional step in the options market. After all, there is obviously a demand for them. At the same time, they are obviously crippled by the exchange execution requirement. Unless they can all cut deals with major exchanges like 3D markets, I think dark pools are going to remain niche players in this business.
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Simon 820 days ago
Scott and adam nunes of the nasdaq appear to be of the same mind on this. They seem to think this is a transitional step for the options biz. I am on their side. Ballista and archangel are just stopgaps till something better comes along.
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Complete Beginner 800 days ago
Poor Scott! I just heard that he "stepped down" over at BOX. I liked him and enjoyed his appearances on OIR. I hope he finds other interesting opportunities.
Regarding the dark pools, I'm still confused about how they will operate in the options market. Isn't it impossible for a dark pool to operate in the options business? If so, then why is there so much fuss over options dark pools?
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Jersey Boy 792 days ago
I didn't know him but I enjoyed his appearances on the radio program. He did the best he could with BOX. That exchNge has some deep problems.
As for dark pools, the market is obviously asking for another way to trade options. I think the exchanges are foolish if they don't pay attention to this demand.
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Complete Beginner 782 days ago
Is Ballista up and running right now? What about Archangel? Are these things real platforms or are they still "in the cloud?"
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Simon 776 days ago
Not yet. At least not in any serious capacity. I think they are waiting for regulatory approval. I think they won't be fully operational until the third quarter.
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Options Guy 771 days ago
These things are bogus from start to finish. Aside from the CBOE/3D deal, they have no exchange or major trading firm support. They are just a press release and a dream.
Nothing more...
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Jersey Boy 765 days ago
People seem to want the options dark pools. I supposed you can't stand in the way of progress. We seem to need this extra liquidity. Maybe the SEC should take a step back and relax the exchange execution requirement so that we can get these things off the ground.
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mark 742 days ago
Although institutional customers might want it, I don't see the SEC relaxing that requirement anytime soon. Ballista, Archangel and others will have to continue to find ways to work around it if they want to bring "dark pool" functionality to the options market.
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Archon 734 days ago
Thanks for the comment Mark. It's nice to see you back on the boards.
There is obviously a strong demand for these crossing networks, as evidenced by the surge of new platforms and the strong hunger for information on Ballista and Archangel. This demand is not emerging in a vacuum. There is obviously a need, or at least a perceived need, for more sources of liquidity in the options market. Unless the exchanges wake up to this fact soon, they may eventually see their business slipping away.
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Jersey Boy 730 days ago
I tip my hat to you as well mark. We don't get to see you around on these boards often enough. I guess you must be busy running this site and doing all of the various PR and media stuff that you have going these days. The site certainly seems to be charging along with a full head of steam, so congrats on your success.
If you ever want to give up this entrepreneur/media darling/options guru gig, I know quite a few people who'd like to have your input on their hedge funds.
I'm just saying...
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Delta Trader 694 days ago
In two words: Hell Yes!!
Executions and liquidity are obviously not good enough for the vast majority of institutional customers. If we want to continue growing this business in the institutional sector, we need to give those customers what they want/need. They obviously want dark pool functionality, so why not give it to them?
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Thomas 691 days ago
I think these dark pools are more trouble than they're worth. They work in the equities markets because they don't have any rules. But the options market is a structure place with lots of regulations. Dark pools can't operate in that environment. If you try to force it, you will end up breaking this marketplace.
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Mr. Magee 681 days ago
I don't see what all the fuss is about. With the exchange execution requirement, you can't have dark pools in the options market. Everything else is just a workaround. You might as well be using IM or your telephone. It has about the same level of functionality.
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Tic Tac 661 days ago
Can someone explain to me the difference between Ballista and 3D Markets? They seem to do the same thing and offer roughly the same products.
Any input?
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Jersey Boy 653 days ago
There is no real difference. Different sides of the same coin.
At the risk of repeating myself, I think it's obvious that we need this type of functionality in the options market. There is an incredible demand for additional execution outside of the exchanges. The industry needs to wake up to the needs of their customers, especially their institutional customers.
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Athos 646 days ago
How long until the exchanges begin to implement this functionality on their own platforms? After all, why do we need third party firms to do this? The exchanges can offer secondary platforms and even integrate some of that liquidity into their standard quotes. How great would that be for institutional traders?
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Simon 611 days ago
I think you hit the nail on the head Athos. This functionality will eventually be offered by the exchanges. They will wake up and see that the crossing platforms are stealing their business and they will co-opt those attempts. Just look at the CBOE deal with 3D Markets. That is the first step in this direction.
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Jester 598 days ago
I think it will be really interesting when the exchanges start getting into this space. There's no way that they will sit back and let 3D and Ballista have all the cash.
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Captain Options 582 days ago
The guy from BOX just said on the podcast that they are thinking about getting into the block crossing market. He also said that they are just following suit with what other exchanges are doing. It sounds like the exchanges are going to be crowding Ballista's space sooner than people think.
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Thomas 486 days ago
I would love to see BOX take on Ballista and 3D at their own game. If an exchange could consolidate that space onto their platform, it would give them an enormous advantage over their rivals.
Go BOX!
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Bacon Lover 63 days ago
Just because there is a demand for dark liquidity doesn't mean that it's good liquidity. Call me a wuss, but I like the relative safety of a transparent, liquid, and regulated market.
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PuntPassShoot 58 days ago
If, at the end of the day, you get filled at your price your trade settles, what does it matter?
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Captain Options 24 days ago
It matters if your trades and liquidity is being executed in the shadows as opposed to the clear light of day. It's bad enough that most of the size options trades are executed over IM these days. But now we've got networks just devoted to routing this type of flow into the shadows. This sounds like a terrible development to me.