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TeraExchange to Launch New Market for OTC Derivatives

New trading venture will offer a central limit order book for swaps and OTC cleared derivatives in Q4 2011.

A new trading venture TeraExchange is gearing up to launch a central limit order book for swaps OTC cleared derivatives in Q4 2011, according to today’s announcement.

Citing sweeping regulatory reforms that are changing the world of trading and clearing OTC derivatives, the firm is seeking “first mover advantage,” according to the release.

Currently registered as an exempt board of trade (EBOT) for swaps and other OTC cleared derivatives, TeraExchange intends to become a swap execution facility (SEF) once the SEC and CFTC rules are finalized as expected in early 2012.

TeraExchange is introducing a platform featuring integrated cross-asset trading, anonymity, pre-trade analytics and voice broker assistance, as well as central clearing through CME, ICE and LCH.Clearnet. In addition, it expects to offer enhanced liquidity, improved pricing, pre-trade credit checks on all bids/asks and streamlined reporting requirements. The firm will provide a C++ algo engine, FIX application programming interface (API) for direct access to the exchange and SDR (swap data repository) reporting.

“Legacy platforms won’t work in this transforming market landscape and new world being created,” stated Christian Martin, CEO of TeraExchangewhich is located in Summit, New Jersey, and has offices in Washington, D.C. “Our agile, transparent multi-asset trading solution can be shaped to accommodate a near limitless number of objectives and strategies,” Marin added in the release.

The platform is open to all eligible contract participants such as corporations, hedge, funds, asset management firms and energy firms.

All cleared OTC derivatives will be available including: interest rate swaps, credit default swaps, energy swaps, non-deliverable forwards and equity swaps.

TeraExchange is a facility of Spring Trading LLC of Summit, New Jersey and Washington, D.C., which has a subsidiary in Germany and plans to expand to Europe, Asia and other locations. Martin, who is a former trader with Merrill Lynch (emerging markets) and Banc of America Securities (credit), is also the CEO and chairman of Spring Trading, LLC.

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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