OTCex, a Paris-based equity derivatives broker formed by professionals from BNP Paribas and Fimat, has attracted 22 members and notched up 610 transactions since going live six months ago with an approach that blends on line and traditional voice brokering. Colin Jolly, coo, said the firm offers delta-neutral equity options on the German, Swiss, French, U.K., Dutch, Italian, Spanish and Belgian listed equity markets. Despite the popularity of the Internet some 90% of the transactions OTCex handles are closed by voice brokers at the firm, he noted. "It takes time to change habits," he said. "In the standard inter-dealer broker market people are used to dealing by phone," he continued.
Banks using the system post an anonymous request for a quote on the firm's web site, Jolly explained. Only after hitting the bid or offer do they learn the identity of the counterparty. If the bank posting a request for a quote does not receive one on line then OTCex's voice brokers will go out and find the market. Banks that have signed up for the system include Credit Suisse First Boston and Bank of America.
