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In a move to aggregate liquidity in the fragmented options market, start-up broker-dealer Ballista introduced the first equity options liquidity pool that will provide electronic access to public and nonpublic liquidity from banks, hedge funds and market makers.
Pending regulatory approval from FINRA to register as a broker-dealer, Ballista planned to launch the new electronic platform - which will focus on block options and complex strategies such as delta-neutral trades - this month. The firm began beta testing the system's business logic and functionality in late April.
The entrance of new market participants and the expansion of exchanges into the equity options space, along with the introduction of new regulations, such as the penny pilot, have created a highly fragmented marketplace, notes Ballista CEO Robert Newhouse. "We're trying to aggregate active liquidity that exists on an exchange as well as the passive liquidity that is not listed anywhere but...