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Watershed Technologies

Providing Access to Real Liquidity in the Option Markets

with an ATS

Stock Exchange

The Watershed Solution

An Intelligent ATS

  • Orders are routed into a private auction with a select pool of Liquidity Providers.

  • Matched Orders are sent to an exchange as a cross ticket with an additional chance for client price improvement at the exchange.

  • Entire process is completed faster than any high-touch solution.

Discreet, Complete, Compliant

  • Clients control who can see orders and their ultimate price is not revealed to Liquidity Providers.

  • All trades are executed on National Exchanges, there is no need for additional clearing arrangements.

  • Transaction data is fully compliant with MiFID II and CAT reporting requirements.

Minimized Market Impact

  • Liquidity Providers have been selected based on their ability to quote and trade size in the volatility markets across the entire term structure.

  • Clients control both the information contained in the order and its path to the listed markets.

  • Third-party surveillance systems ensure client orders are not moving markets outside the ATS.

Stock Exchange
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Trading Graphs on Computer Monitor
Trading Graphs on Computer Monitor

Order Senders & Liquidity Providers

Watershed's Order Senders are a mix of option market participants comprised of banks, hedge funds, asset managers, interdealer brokers, outsourced trading desks and various other institutional users of the option markets. They vary in size and level of activity but share a common desire for a true broker-neutral solution completely protected from the preferential order routing practices that have become widespread in the marketplace.

The Liquidity Providers are proprietary trading firms and hedge funds who have been selected for their individual reputations as bona fide volatility traders, not focused on high-frequency trading nor capturing profits through sheer size and market share dominance.

Watershed utilizes a third-party monitoring system for all orders to ensure that no participants are moving markets or engaging in any suspicious activity.

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