Matrix Executions

With the constant evolution of financial markets, traders face the perpetual challenge of adapting to shifting market conditions, regulatory demands, and technological advancements. Simultaneously, the tools at their disposal must keep up with the relentless progress of the industry. Outdated legacy systems must either integrate with intricate operational workflows or make room for modern alternatives. Today, operating in markets characterized by high volatility, deteriorating liquidity, and increased risk has become the “the new normal” for professional traders and institutional firms.

Matrix Executions, a Chicago-based agency-only broker-dealer and trading technology provider, brings over 40 years of experience in listed options and trading system architecture to the table. “We have been practitioners, traders, brokers, so we have stood in the shoes that our clients currently stand in. I think that gives us unique insight into the challenges that our clients face,” says Joe Corona, Chief Strategy Officer of Matrix Executions. Founded by a team of veteran derivatives traders, Matrix Executions’ offering is singularly designed to serve the dynamic, evolving and nuanced needs of sophisticated traders, professional trade desks, and institutional buy-side and sell-side firms. In today’s fragmented markets, traders not only thrive on adaptability and nimbleness but also demand precise command over their workflows and strategies, down to the granular details. Joe explains, “Our systems are designed to be malleable, interchangeable, and adaptable to user’s demands. This ensures that clients can modify the systems to meet their specific requirements, even as market conditions and regulatory requirements continue to evolve.”

For traders, while some operational hurdles in today’s markets may be temporary, other pain points appear to be here to stay.

“One of the big challenges now is finding liquidity,” says Corona, addressing the current state of market fragmentation across trading venues and growing number of exchanges. “Our mission is to design execution algorithms and approaches for the market that allow traders to source and capture liquidity, and deliver price improvement to their clients,” he explains. With liquidity sourcing problems becoming ubiquitous, Corona and his team fast-tracked the development and deployment of a new suite of specialized strategies for their clients: “We have developed and rolled out a set of price discovery algorithms, which have been very well received. These price discovery strategies allow our clients to offer price improvement, source extra liquidity outside of what is readily available through standard market screens, and, at the same time, protect them against market movements while these types of orders are working. One of the strong points of our system is that we have a library of over 150 behavior modules and parameters that can be added to, or removed from, any particular strategy. And that really makes it easy for us to adapt to each client’s particular requests.”

As a young startup, Matrix Executions stands out in terms of its robust high touch trading capabilities. With HT teams on both the BOX and Cboe trading floors (a new Cboe SPX team debuted in early 2023), in the company’s ecosystem of services, Matrix Executions’ floor brokers are a core part of the company’s operations with their services completely integrated in its overall electronic offering.

Having started his own career in Chicago’s trading pits in 1984, Corona reflects on what makes Matrix’s HT team stand out in the crowd. “We have evolved from open trade pits to a highly sophisticated operation, and we always emphasize that our high touch team is a little bit different than most. They do not exist on an island, separate from the rest of our core offering.” In this way, Matrix’s HT value proposition is unique - providing users with full access to its floor broker services via its front-end trading system where they can submit orders straight to the floor. “When any of our users have a specialized order type, or they need human handling of an order that is very complex and difficult to codify into an electronic order, they can always access our high touch team through our system as well."
This spring, Matrix Executions was awarded the prize for “Best Options Trading Technology Provider” of the year at the 2023 Markets Choice Awards. The development and delivering bespoke, cutting-edge, seamlessly automated trading technology solutions for traders is what the Matrix Executions team is most passionate about, and what it does best. The team takes a highly-consultative and hands-on approach to working with clients, handling all phases of client projects in-house, and guiding them from start-to-finish. With the constant evolution of the derivatives landscape and financial markets, the advisory and collaborative element of project is just as important as the final deliverables. Given the deep roots in the derivatives industry of the company’s team, they imparts their knowledge of market structure, routing and execution, order management, risk management, technology infrastructure, exchanges pricing models, and market trends to deliver highly-sophisticated solutions and technology to today’s trading professionals. The team also allocates time to projects that optimize general industry-wide challenges or inefficiencies. Today, Matrix Executions is working on developing a first-of-its-kind system for use with flex options. Its new flex option technology solution will be able to seamlessly handle the many disjointed and labor-intensive processes that are currently associated with trading flex options and integrate them to simplify trading workflows for the product. “We have heard from our clients that they find the trading of flex options to be very manual, very slow, inefficient, and frankly kind of clunky,” says Corona. In the team’s usual spirit of innovation, Corona explained, “We have been tasked with building systems that can streamline that entire process, from the pricing of flex options, to finding sources of liquidity for flex options, the execution, reporting, audit trail – all of it in one seamless process and system.”

Noting the surge in interest on flex services in recent months, Corona also flags another growing business area for Matrix Executions -- the rise of complex options and complex order book trading. “Each exchange has its own set of rules, and they are not necessarily required to honor prices from any other exchanges. So, in order to get the very best prices, when you are trading in and out of complex orders, you need very sophisticated tools. We build specialized hybrid, complex order types so that in addition to trading complex orders on the complex order books, orders will also simultaneously trade on the single leg books based on their independent subcomponents.” With an abundance of trading technology projects in progress, Corona confidently foresees that Matrix Executions is on the brink of an exceedingly busy year in 2023.