Goldman Sachs Selects Derivix for Real-time Options Pricing and Analytics

Goldman Sachs has selected Derivix as the exclusive provider for advanced real-time options pricing and analytics within its Goldman Sachs Electronic Trading (GSET) Signature Programme. According to the vendor, the selection was driven by client demand for fast, accurate and efficient analytics.

As a signature partner in the programme, Derivix’s options pricing, analytics and risk visualisation capabilities have been integrated into the GSET REDIPlus multi-broker execution management platform. The vendor claims that this allows REDIPlus clients to benefit from Derivix’s analytics front end, while Derivix clients benefit from GSET’s advanced options algorithmic offerings and the breadth of the REDIPlus platform.

Using the joint solution, clients can access GSET’s options algorithms from within the Derivix trade ticket that features real-time risk visualisation directly built in, says the vendor. Traders can run real-time simulations and pre-trade analyses leveraging the Derivix’s proprietary ‘volatility time’ options pricing model and then route orders to GSET.

Derivix’s rationale behind its solution is that real-time analytics and execution will enable traders to keep pace with the speed of change in the market. Michael Barrett Stern, co-founder and chief strategy officer of Derivix, explains: “Without modern, high performance solutions, options traders would be challenged to fully capitalise on the market volatility and tremendous change we are witnessing in the options industry today. To address these needs, Derivix provides options traders with the speed, analytic accuracy and flexibility they need to visualise and execute winning trades ahead of their competition.”

Kevin McPartland, senior analyst at Tabb Group, highlights the predicted increase over the next few years: “The snowball effect of electronic options trading is just beginning. Based on our conversations with leading options market participants, by 2010 two thirds of all buy side options trading will be conducted electronically.”