Egar Technologies has launched its Egar One suite of applications, data and services for equity-derivatives trading and risk management. The Egar One suite brings together modules previously offered separately to fully integrate functionality for volatility surface generation and management, trading and risk functionality. The modules integrated with the Egar One release include Egar ETS, portfolio-level delta and vega hedging from Egar Hedger, pre-trade analytics from Egar Dispersion ASP and data from IVolatility.com.
"We're trying to tackle three main aspects of equity options trading," says Ravi Jain, CEO of Egar. "To have solid, cutting-edge technology, good analytics and the data to drive it all." Jain adds that Egar One is targeted at a variety of potential end users, from small market makers to large, active hedge funds. Egar One provides the functionality of a traditional market-making system in addition to supporting the requirements of screen-based trading. Egar One takes a portfolio-approach to equity options trading and is scalable for traders to trade options on a large number of stock more efficiently, says Jain.
Egar One also provides connectivity to electronic markets such as the International Securities Exchange through its ISE quoting interface. To help traders hedge and manage risk more efficiently, Egar One offers analytics for beta adjusted stress test/scenario analysis, optimal hedge suggestion based on delta or vega, implied volatility correlation analysis of vega risk and risk monitoring. Risk can be measured and monitored at the trader, sector or firm level.
Egar One also has an advanced volatility manager with the ability to generate intra-day volatility surfaces for many different stocks. "This piece is critical for anybody who wants to start auto market making on electronic exchanges," says Jain who emphasizes that the ability to manage volatility surfaces is important for automatic price making. In addition, Egar One offers Egar Hedger for hedging analysis, which gives users the ability to run portfolios and run optimum hedges for both delta and volatility hedges.
The implied volatility data from IVolatility.com is delivered as a daily feed to Egar One users and Egar can also help clients build their own internal database for the data as well as customized analytics around the data. "Trading systems, analytics, data, interfaces with other systems, these are all pieces of the suite and depending on what the users needs are they can be mixed and matched," says Jain.
He adds that Egar One pricing is based on a per user, per month licensing arrangement according to number of users and modules selected. Although he would not name any of the firms directly, Jain says that several large banks looking to become more active in electronic-market making for options have expressed interest in the product.