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Goldman Sachs Releases Automated Delta Hedging for Options

GSET's new functionality enables automatic hedging with the underlying equity for all US options algorithmic strategies.

Goldman Sachs Electronic Trading (GSET) announced new options electronic trading functionality, known as Delta Hedging, which enables automatic hedging with the underlying equity for all US options algorithmic strategies.

“GSET is continuously looking for innovative solutions to offer our clients best of breed services across asset classes,” comments Greg Tusar, managing director and co-head of Goldman Sachs Electronic Trading, in the release. “This new hedging functionality is one of our many cross-product algorithmic solutions that help tie together our services into a single solution for the end client.”

By definition, an options delta measures the sensitivity of an option's price to a change in the price of the underlying stock, according to Optionstradingpedia.com.

GSET’s Delta Hedging feature provides clients with the ability to automatically hedge their US-listed options smart order types based on the delta at the time the parent order is entered. The Delta Hedging mechanism leverages GSET’s advanced equity smart order router and its crossing network, Sigma X to assist in sourcing available liquidity when hedging.

“This new functionality enhances our entire suite of options algorithms which affords our clients the ability to automate the processes involved in delta hedging while simultaneously ensuring real-time hedging against their options orders,” said Vishal K. Gupta, VP and head of US-listed options business development, GSET. “With this evolution of our product, GSET continues to be a leader in the US-listed options electronic trading space,” added Gupta.

GSET’s Delta Hedging offering is available for clients of Goldman Sachs Execution & Clearing, L.P.

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

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