Options Watch is a new straight-through processing (STP) workflow solution for option exercise/assignment and close outs. Options Watch helps firms to better manage operational risk and reduce the risk of potential losses on option exercise and close out processes.
Until now, it has not been possible to bring the same degree of automation to the post-trade processes of option that have been achieved in other exchange-traded derivatives, where GL Clearvision has brought real clarity. The main reason is because of the additional complexities around the whole process of option exercises and abandons. This is still manually intensive and as a result of the lack of automation, a very high level of operational risk remains in the post-trade option environment.
This situation has now changed with the launch of Options Watch. This innovative solution has been designed in partnership with a major global clearing firm and thoroughly road tested. Options Watch may ultimately revolutionise the post-trade handling of options in much the same way that GL Clearvision did for clearing other exchange-traded derivatives.
“For the first time, users of Options Watch will be able to monitor each step of the options management chain whether there are exercises, abandons and assignments and to fully automate their close-out processes,” says Laurent Jacquemin, Global Head of the post-trade services at SunGard’s global trading business.
There have been several high-profile incidents of institutions incurring losses as a result of incorrect exercises. Being able to fully automate the process helps mitigate operational risk substantially. Jacquemin says that there are also other business benefits to be gained from using Options Watch. It also allows users monitor their P&L far more powerfully and arguably accurately in their option exercise request.
“At the moment, back-office staff have to spend a lot of time – in some cases several hours – carrying out all the post-trade tasks around close out process. Options Watch works in real-time, so it really frees up staff to focus on more pressing or value-adding work”, he adds.
“This is a unique and powerful solution which can really add value to SunGard customers. Options Watch has the potential to completely revolutionise the post-trade options management,” concludes Jacquemin.
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