Next Generation Liquidity Sourcing Tools for the Equity Options Market
Watershed was created with a with a singular mission, fix the inefficiences pervasive in equity option execution.
Genuine Broker Neutrality
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Electronically sourced liquidity has always flowed through broker-defined routes to exchanges with the greatest commercial benefit to those making the routing decisions, the brokers.
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Broker-sourced liquidity is a time-consuming process where information leakage is a real concern, and pricing is dependent on the level at which the order can be filled.
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Moral Hazard: executing brokers’ routing decisions are often based on internal liquidity and payment for order flow directives. Further, routing outcomes for some clients may be influenced by franchise considerations of their larger clients.
Exposing Your Flow to Liquidity Adds
Power to Returns
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What is the Answer?
Watershed Technologies has partnered with Wall Street Access to host the ATS using Watershed's proprietary order matching technology and routing algorithms.
The ATS is a 15-millisecond broker agnostic liquidity source; it solicits responses from a group of top tier liquidity providers who are incented to compete for your order. Once an order is matched, the order is sent to an exchange to be crossed inside an exchange auction, creating another opportunity for price improvement.
This process of auction creation offers a real opportunity for better pricing, and it drastically reduces the cost of taking displayed exchange liquidity.
The ATS creates minimal market impact: only size and side are shown to the liquidity pool. Price is only revealed if a match takes place.
The ATS is compliance friendly and compliments almost any OMS and algo suite. Think of the ATS as either (1) a stand-alone route where matched flow is sent down to the exchange to be crossed and unmatched flow routed per your instruction, or (2) as a bolt-on to your current algos where your order swings by our liquidity pool. If there is no interest, it continues along your specified path.