Users of IntercontinentalExchange’s (ICE) Winnipeg-based electronic canola and barley trading platform will now be able to set up user-defined spreads (UDS) and requests for quotes (RFQ) for their option contracts.
Starting Wednesday (Nov. 3), ICE Futures Canada will implement UDS and RFQ capabilities for options on its trading platform.
UDS will allow participants to set up specific options and options/futures strategies that consist of multiple legs. Once a UDS is set up, UDS messages are broadcast to the market to indicate the user’s interest in a specific strategy.
UDS will support any trading strategy, including ratio spreads as well as hedged options (delta hedged) with the underlying futures contract. It can support up to nine legs and two hedged legs.
UDS strategies do not persist from one trading day to the next and must be recreated in the platform each day, ICE Futures Canada noted Monday in a statement to participants.
RFQ capability, meanwhile, will allow participants to send a message to the ICE trading system to indicate an interest in a UDS or in a specific product — for example, a single option contract.
An RFQ message on the system will allow ICE Futures Canada participants to indicate they are interested in trading a specific market. Once an RFQ is published in the electronic trading platform, traders can respond by entering a bid or offer. Such bids and offers are immediately tradable, ICE said.
RFQ capability, however, will not support futures-only markets (either single-leg or spread markets) at this time, ICE said Monday.
Both UDS and RFQ capability will be supported on WebICE. More information on both capabilities is available online.
Market participants who access the market by way of an independent software vendor (ISV) or a Direct Access firm should contact their provider to discuss the new capabilities, ICE said.
UDS and RFQ will also be supported for participants with API access to the markets, but API users will want to talk to ICE about those capabilities, the company said.