Apr 13, 2018
CTO Interview: Today we feature special guest co-host Peter
Maragos, CEO, Dash Financial.
Catching up with Dash:
- When Peter was last on Dash had just acquired the LiquidPoint
business from Convergex with the help of private equity firm GTCR.
Now they've just partnered with Flexpoint Ford, another PE firm.
What was the impetus behind the second transaction?
- Dash has an impressive suite of diverse products and services -
smart order routers and algos, the Dash360 analytics platform,
trading workflow tools, an options ATS and even human traders.
- What are the upcoming projects/initiatives at Dash?
- Peter's views on crypto trading
Hot Topics in Tech: Smart Routers
- Today's topic was inspired by the following listener question:
Question from See16: Can you please do a deep dive into smart
routers on a future program? They are the secret sauce of the
market these days but no one really seems to understand how they
work. Shedding some light on the otherwise dark world of routing
would be a great service. Smart Routing Deep Dive: Quite a few
things happen after you hit the trade button in the options market
- probably much more than most people realize. Your order has to
get routed from your broker/execution platform to the exchange. But
it's not a simple path. That's where smart routers come in. What is
a smart router? What do they do? What makes them smart? What are
the different rules/filters/configurations that most smart routers
have to consider? - NBBO, exchange fees, size, exchange pricing
model, PIP auctions, payment for order flow rates, etc. What about
resting orders? Are the smart routers constantly monitoring them
and rerouting if necessary? Why do we need them in the options
market? How do options smart routers differ from equity smart
routers? Why have smart routers become so controversial in the
options market? Spreads: This is the Achilles heel for many "smart"
routers since every exchange has its own spread book and they don't
talk to each other. So you could easily work a spread order that
lines up on one exchange but, because your order was routed to a
different spread book, your trade isn't filled. How do we overcome
the spread routing issue in 2018? Is it a tech problem or a
regulatory problem? Final thoughts/takeaways on smart routers?
The Inbox: Listener questions and comments
- Question from Nikes T: Hey Options Insider! Love the network
particularly the tech talk. We need more episodes! On an upcoming
show do you think you guys could talk about why dark pools don't
exist in the options market? Is it a tech limitation or something
- Question from LaLaLad: Does block chain have any practical use
on the trading front or is it all just back office stuff?