Wedbush, Inc. said today it has acquired Lime Brokerage LLC, an agency brokerage firm known for its ultra low-latency and trading technologies serving high frequency traders. Financial details were not disclosed.
The acquisition of Lime will enable Wedbush to expand its offering of collocated direct-market access (DMA) platforms, executions in multiple asset classes and offer tighter integration with its clearing services.
According to Kevin Beadles, managing director, Electronic Solutions Group at Wedbush Securities, who was interviewed this morning, the Lime acquisition satisfies two needs: It provides “ a lot of integration for our high frequency trading and clearing business. Now we have a fully deployed platform for execution services,” says Beadles. In addition, Wedbush feels it can offer customized DMA/collocation platforms for other professional clients. “For the institutional buy side and broker dealer crowd, we have now a wide expansive set of tools, a full suite of algorithms and one of the top execution platforms for options,” says Beadles.
Founded in 2001 and privately-held, Lime will operate as a wholly-owned subsidiary of Wedbush, Inc., a full service investment firm headquartered in Los Angeles and the parent company of Wedbush Securities, the #1 ranked liquidity provider on the NASDAQ exchange for the past 5 years.
Lime Brokerage has been a “best of breed” technology provider for the high frequency trading crowd, says Beadles. The firm represented about 5 percent of the daily trading volume on Nasdaq, at one time.
Some of Lime’s high frequency trading clients cleared through Wedbush. “It’s a seamless integration for them,” says Beadles.
The combination of the firms will result in a suite of products for ultra low-latency, low-cost, and high-volume equities, options and futures trading. Moreover, Lime provides Lime Inside, technology platform from which Wedbush plans to develop and deliver innovative brokerage services in multiple asset classes and geographies for its buy-side, professional, and individual clients, according to the release.
Lime Inside will enable each individual client to have a collocation platform that is set up specifically for themselves, says Beadles. “What’s unique in the world going forward, and might be the new paradigm, is they could set up Lime Inside collocations for specific firms and for the buy side itself," says Beadles.
While Wedbush previously had its own data centers, it now has gained Lime’s data center in Jersey City and can offer more asset classes — equities, options and futures and is looking at offering European and Canadian equities.
Declining U.S. equities volumes may have played a role in Lime’s decision to sell the firm, but Beadles says Lime was seeking a partner more to take advantage and really commercialize the tremendous engineering team they have in terms of their products. “They have a pretty concentrated effort in the high frequency space but now we can expand that into both buy side and sell side tools,” says Beadles.
Beadles says Lime will give his firm “a fully rounded package which is best-in-breed technology and software and tools in order to execute and provide risk management tools in place, and then clearing it at the end of the day.”
Wedbush’s Jeff Bell will assume Lime’s CEO position in addition to his responsibility as Head of Wedbush Securities’ Clearing and Technology Group. Eric Wedbush and Gary Wedbush, both executives at Wedbush, will join Lime’s Board of Directors. Lime’s employees will continue to be located at offices in the technology denter in Waltham, MA, New York City, and data center in Jersey City, NJ. Additionally, Lime will continue to manage co-location sites at major liquidity venues.