Institutional brokerage BTIG has recruited a derivatives specialist from Deutsche Bank’s Global Markets division to run its new equity options capability in Australia.
Rod Skellet joined BTIG a fortnight ago, one week after the broker qualified for an options licence from the market regulator. He will develop the new capability, which sits alongside its existing institutional equities and outsourced trading offerings to the domestic market.
Jesse Lentchner, the broker’s Asia-Pacific head, said the service was being provided in response to client demand, and added that the withdrawal of some domestic market-making operations provided opportunities for brokers to “source liquidity” in the options market.
He attributed the withdrawal of smaller market-makers to the increased amounts of capital now required to run this line of business. This allowed new entrants an opportunity to gain a foothold in the market.
“Market-makers are a key part of options [trading]. People are still trading options the same way, but now they go through brokers,” Lentchner said.
The brokerage’s Australian boss, Paul Brech, said the “true value” of options broking was achieved by “watching and managing the position through the entire life of options – all the way through to expiration and beyond”.
Skellet would be responsible for expanding BTIG’s equity derivatives franchise and would support the broker’s primary options trader, Tim Delaney, in addition to complimenting the institutional equities team, Brech said.
In his 25 years in the industry, he helped set up Ord Minnett’s options sales team in Australia and worked with BBY before undertaking five-year tenure with Deutsche Bank.
Lentchner said the company preferred to hire experienced traders with good contacts and who knew how to find liquidity. It did not hire young, inexperienced staff alongside the older heads.
“At BTIG we don’t have much of the bottom half.”
BTIG established an office in Australia about two years ago, and services more than 100 clients.