Jeromee Johnson, senior analyst at TABB Group, the financial markets research and advisory firm, is leaving his position this week to join 3-D Markets Inc., a software developer that is about to launch the first block crossing network for U.S. equity options. As of Aug. 1st, Johnson will run the day-to-day operations of 3-D Markets Inc., the software firm, founded in New Hope, Penn. by algorithmic trading guru Dave Mortimer, but he will also be responsible for product development, client integration, technical sales and a variety of other areas.Johnson's main priority will be the launch of Archangel, an options platform that will execute options trades away from exchange. "We should be in beta by the end of September," says Johnson. Archangel will be aimed at liquidity providers (market makers), asset management companies and hedge funds.
Johnson is returning to his roots as an implementer of automated trading strategies and algorithmic execution mechanisms. Prior to joining the TABB Group in January of 2006, Johnson was director of product development and professional services at agency-broker UNX and earlier on in his career, was a senior technical engineer at Javelin Technologies.
With all the changes going on with options market structure, such as Nasdaq finalizing its options market exchange and introducing ECN-like order types such as reserve and midpoint pegging coupled with the SEC looking to expand the options trading in pennies, Johnson felt there was an opportunity to launch a dark pool. "In a fragmented options market dealing with auto-ex, you can't display the same size. "You can't go in and quote a really big order. You have to go into dark pools," he suggests. But in options, trades need to be printed on an exchange.
What is the value proposition behind Archangel?
To limit information leakage and market impact, Archangel won't tell participants the underlying name of the stock. Instead it will provide the risk characteristics of the option - the Greeks - delta, gamma, theta and if it will give the industry sector and some sort of indication of size, says Johnson.
Given that options traders are also active in the underlying equities, 3-D Markets is also working on an equity-only ATS called Halo that will be live by the end of the year, says Johnson. According to the firm's Web site, "Halo will solve the major dilemmas facing equity ATS users: low cross rates, toxic counterparties and confusing business models."Jeromee Johnson, senior analyst at TABB Group, the financial markets research and advisory firm, is leaving his position this week to join 3-D Markets Inc., a software developer that is about to launch the first block crossing network for U.S. equity options. Ivy is Editor-at-Large for Advanced Trading and Wall Street & Technology. Ivy is responsible for writing in-depth feature articles, daily blogs and news articles with a focus on automated trading in the capital markets. As an industry expert, Ivy has reported on a myriad ... View Full Bio