Ballista Securities

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Ballista Securities
Founded	2007
Headquarters	New York, NY
Key People	Robert Newhouse, CEO
Employees	20
Products	Options liquidity pool
Web site	www.ballistasecurities.com

Ballista Securities is a New York-based, privately held broker-dealer. It will offer electronic access to public and non-public liquidity from banks, hedge funds and market makers.^[1]^[2]Ballista expects to launch operations via a private broker-dealer in September of 2008.

On Aug. 18 of 2008, Ballista announced that it had received FINRA membership approval, which would allow full trading operations to begin.^[3]

Ballista plans to bring together liquidity providers with initiators such as banks and hedge funds seeking liquidity. It will screen participants based on creditworthiness, size, trade, volume and frequency of participation in the initiator versus contra role. The system will provide a FIX-based interface supporting algorithmic trading desks and electronic market making desks.^[4]

The Ballista platform links the buy side directly to all potential contras via a limit book interface and negotiation functionality. Users can choose order exclusivity or order concealment, which are unavailable in the current market. It offers a choice of execution pathways - a front-end application for trader interaction, or a FIX-based interface supporting programmatic order flow from algorithmic trading engines and OMS/DMA platforms.^[5]

1 History
2 Products and Services
3 Key People
4 References

History

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Ballista Securities was co-founded in 2007 by Robert Newhouse, part of the team that launched Island ECN. The company received FINRA approval as a broker/dealer in August 2008.^[6]

Products and Services

Ballista specializes in the execution of volatility (tied or delta-neutral) and directional (block trading) options. The Ballista platform serves buy-side, sell-side and market-making entities.

Ballista’s trading model is based on a patent-pending Reactive Auction Process. In this process, a trader submits a block-sized directional option strategy or delta-neutral/volatility order, using unique order types such as Exclusive or Phantom, a non-displayed order mechanism. The order is then broadcast to Ballista participants that have indicated their interest in trading specific symbols, sectors, or index components. Ballista participants may execute against initiated orders, which are then crossed and/or printed on an applicable securities exchange such as ISE, CBOE, and NASDAQ TRF.

Ballista handles the following transaction types:

Volatility (or delta-neutral) Transaction - traders may enter block orders of up to three listed option components, and one additional stock component, with the stock component an equal delta hedge to the options being traded. All legs are traded contingently as a set, with the trader having no leg or partial package risk. Minimum order size is 500 contracts.

Directional (or Non-tied) Transaction orders may also be entered for up to three option legs with no stock component. Orders for individual option legs or option spread strategies may only be entered within the current NBBO, and are automatically canceled if they lock or cross the public options NBBO. Minimum order size is 500 contracts.

Ballista offers the following order types:

Exclusive Order - This order type affords a trader seeking liquidity the ability to ensure he is not outbid or “pennied” for the duration of the timed auction. By enforcing a trader’s priority to the debit or credit side of an auction, an exclusive order is ensured to trade if sufficient liquidity is available. A trader must display SIDE and SIZE of an Exclusive order, but may optionally show/hide PRICE.

Phantom Order - This order type offers a trader the ability to leverage a non-displayed order, but allows any other Ballista participant to post both bids and offers in response to an initiated phantom order. As such, a phantom order may not trade due to other participants improving the current quote and establishing priority. Phantom orders display SIZE only - PRICE and SIDE are non-displayed.

Ballista allows access via three interfaces:

JAVA-BASED FRONT-END

Using the Ballista front-end, a trader may initiate orders, indicate interest in specific symbols, sectors, or indices, and receive advertised orders. The Ballista front-end offers the full functionality of the Ballista platform, and provides a visual mechanism to source liquidity in delta-neutral or directional orders.

INDEPENDENT SOFTWARE PROVIDERS / THIRD-PARTY BROKER-DEALERS

Many OMS and EMS vendors now offer access to Ballista, offering the ability to initiate orders, and in some cases, receive orders advertised by other Ballista participants. Various DMA platforms also support Ballista access via their associated broker-dealer units.

FIX CONNECTIVITY

Ballista supports FIX connectivity by any external application with the ability to communicate using FIX v4.2, 4.3, or 4.4. The entire suite of Ballista functionality is available via the FIX interface, including the ability to initiate new orders, respond to advertised orders, and carry on negotiation sessions with counterparties.