Marex Spectron, Updata Partner on OTC Options Data

Marex Spectron already provides Updata with real-time data from its OTC markets to support joint clients’ trading activities. However, the new datasets will enable traders and analysts who trade OTC gas, power, coal and emissions to better view trends and histories, officials say.

The first dataset covers weekly at-the-money (ATM) implied volatilities for European gas, power, coal and emissions markets, such as German power,  API2 (coal), and European Union emission Allowances (EUAs). The second dataset provides daily volatility surfaces for gas, power, coal and emissions markets, such as NCG (German gas) options.

The data is delivered in spreadsheets, which Updata converts into volatility smiles and histories before publishing them on its platform to enable users to visualize how the options have traded over time, says Updata chief executive David Linton. To export the data from the spreadsheets, the vendor is using the Updata Collect tool that it launched in February, which extracts and transforms data from spreadsheets, PDFs, Microsoft Word documents, emails and web pages into price histories.

“A lot of end users want to get data out of spreadsheets, so they can use the data analytically and analyze it better than they can in Excel, which is great for tabular data but runs out when one wants to do more detailed graphing or visualization,” Linton says. 

‘Collect’ Call
Prior to the launch of Updata Collect, users could manually export data from spreadsheets in the Updata platform, whereas the new tool enables the vendor to manage the process itself, thus saving time. “If a spreadsheet format changes, you’ve got to re-jig it. And whereas it could take customers an hour, we have ability to do it in a matter of minutes… a managed service just works better as clients don’t have to mess around getting data from spreadsheets,” Linton says.

Marex Spectron’s daily volatility surface and weekly ATM runs are aimed at trading firms’ trading, risk management and valuation departments, with the daily spreadsheets used by those who require more in-depth information, says Richard Frape, director of market services at Marex Spectron.

“We are seeing a lot of demand for our daily volatility surface and weekly ATM runs—we are regularly told that they are the most reliable in the market—and Updata also had requests from its customers for the data, so it seemed a good time to push the data onto the platform,” Frape adds.

The weekly ATM data is available via direct subscription from Updata, while the premium daily surface data is only available to customers that have also signed a subscription agreement with Marex Spectron.

As exchanges continue to move into the OTC business—for example, via the electronification of swaps—brokers are moving towards more complex options and structured deals. As such, demand is growing for transparency into these products and the ability to carry out technical analysis, Linton says.