When Societe Generale Luxembourg, the country’s oldest foreign banking institution, sought to improve its execution process in cash equities, it turned to Optiver as a trading partner.
SG Luxembourg was looking for ways to improve its venue executions, in particular by attempting to limit the market impact of its trades. While trading equities on venue has many advantages, orders trading on the book can move prices, creating slippage between the order arrival price and its executed price.
The bank was already familiar with Optiver as a counterparty. Among other things, SG Luxembourg traded exchange-traded funds (ETFs) directly with Optiver via Request-for-Quote (RFQ) platforms.
As a way to improve its processes, SG Luxembourg has adopted a solution that automatically executes all cash equities trades that meet certain internal criteria with counterparties against a risk price. It counts Optiver among its key trading partners in this innovative venture.
“By trading directly with Optiver, SG Luxembourg is able to get fine-tuned access to our liquidity,” says Jean-Marie Tine, head of delta-one institutional trading at Optiver.
“It’s part of a major change in the market structure, which is the direct connection of the buyside to the market maker,” says Matthieu Chomez, execution dealer at SG Luxembourg.
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