--Deal expands Lightspeed's reach into growing options market
--Looking at potential opportunities in futures, bonds, Canada
Lightspeed Financial Inc. is pushing into the stock-options business with the acquisition of Greenmoor Financial Group, extending a string of deals aimed at bulking up the company's brokerage and technology offerings.
Purchasing the Chicago-based firm expands Lightspeed's capabilities for electronically structuring and directing options trades, and taps into a market that has continued to expand while stock trading has stalled. "This diversifies us and expands our product offering to options so we can be more of an agency broker there," said Stephen Ehrlich, chief executive of Lightspeed Financial sells brokerage services to individual traders and institutional investors, alongside a range of software and technology services that grant access to exchanges and manage strategies.
Through a series of acquisitions, the New York firm is adding new markets and geographies as its core business, centered on U.S. equity trade, confronts a now-yearlong slowdown in trading activity. In that time options volumes have continued to grow, with industry clearinghouse OCC anticipating another record year of business.
The Greenmoor deal doubles the size of Lightspeed's Chicago staff to 30 and upon closing will see Lightspeed customers representing as much as 3% of daily trade in U.S. options markets, according to Ehrlich.
A bigger footprint in the Windy City will raise Lightspeed's profile with Chicago's fertile cluster of proprietary trading firms, which have become central as liquidity providers to U.S. stock and derivatives markets.
"We feel Chiacgo's a very important market, with a very distinct set of customers," Ehrlich said.
Lightspeed intends to keep Greenmoor's management and staff, Ehrlich said. Terms of the transaction weren't disclosed.
Integrating Greenmoor will bring aboard more ways to electronically route orders across the nine U.S. options markets and the ability to structure more complex transactions, Ehrlich said. The firm currently executes about 3.5 million contracts per month.
Lightspeed, which last month expanded into Europe by acquiring a unit of Lime Brokerage, continues to look for deals in other asset classes and jurisdictions. Ehrlich said futures and bonds represent potential venues for expansion, as well as Canada.
*Special thanks to Option Radar, BMO Capital, MEB Options, LiveVolPro, CBOE, Option Monster, T.O.P. group, and all of the options desks and traders we work with to provide the option flow!
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