Goldman Sachs and Schwab Announce Options Order Routing Agreement
NEW YORK The Goldman Sachs Group, Inc. (NYSE: GS) today announced that OptExSM Services LLC, its wholly-owned subsidiary, has entered into an agreement with Charles Schwab & Co. Inc. in which Schwab will route and execute single-leg options orders via OptEx'sSM technology-based routing system. Terms of the agreement were not announced.
The OptExSM system uses advanced technology to scan the entire options marketplace, and route orders automatically based on the best price available nationwide and other execution quality factors. This "hunt and seek" approach for determining best price contrasts with traditional static order routing.
"Price, speed and access to liquidity are all critical to options traders," said Lon Gorman, Vice Chairman, The Charles Schwab Corporation. "This business relationship places Schwab and OptExSM at the forefront of a new frontier in the options world one that relies on state-of-the art technology to enhance customers' trading experiences and results."
"We are pleased that Schwab has chosen Goldman Sachs as its partner for options routing and execution," said Robert Steel, Vice Chairman of Goldman Sachs. "We are committed to providing the best of our technology and expertise so that Schwab and other retail firms can share those benefits with their customers."
OptExSM, which will act solely as agent on behalf of orders routed through the system, will access liquidity from a number of specialist and market making firms, including SLK-Hull Derivatives LLC. SLK-Hull Derivatives is a wholly owned subsidiary of The Goldman Sachs Group, Inc. and an affiliate of OptExSM. OptExSM is a service mark of Goldman, Sachs & Co.
The Charles Schwab Corporation (NYSE:SCH), through Charles Schwab & Co., Inc. (member SIPC/NYSE), U.S. Trust Corporation, CyberTrader, Inc. (member SIPC/NASD) and its other operating subsidiaries, is one of the nation's largest financial services firms serving 7.9 million active accounts with US$857.7 billion in client assets through 429 domestic offices, 5 regional client telephone service centers and automated telephonic and online channels. About 25% of Schwab's client assets and 10% of its client accounts are managed by approximately 6,000 third-party, fee-based investment advisors served through Schwab Institutional. The Charles Schwab, U.S. Trust and CyberTrader Web sites can be reached at http://www.schwab.com, http://www.ustrust.com and http://www.cybertrader.com respectively.
Goldman Sachs is a leading global investment banking, securities and investment management firm that provides a wide range of services worldwide to a substantial and diversified client base that includes corporations, financial institutions, governments and high net worth individuals. Founded in 1869, it is one of the oldest and largest investment banking firms. The firm is headquartered in New York and maintains offices in London, Frankfurt, Tokyo, Hong Kong and other major financial centers around the world.