In an attempt to enhance its technology space,
) announced the acquisition of WhenTech - a prominent technology,
software and information supplier for the options market. Financial
and other details of the deal remain undisclosed.
The acquisition will enable ICE to offer superior options
trading by assimilating its option services with WhenTech's pricing
and risk management proficiencies, which leads in the US market.
Consequently, traders at ICE will now be able to ascertain option
trading occasions more quickly and efficiently enjoy smooth
execution of such trades.
This is not the first time that ICE has been associated with
WhenTech. The company's subsidiary YellowJacket's trading
relationship with WhenTech dates back to May 2012, whereby ICE Chat
platform was established to swiftly detect options opportunities in
the market and relay those messages instantly. Such processes have
resulted in effective and attainment of timely request, execution
and order fulfilment for cross-trading transactions.
Hence, based on a successful and productive past performance, we
believe the acquisition should further help ICE achieve its goal of
providing the best technology experience to customers. Moreover,
given the fact that sluggish transaction volumes have been
deteriorating the growth prospects across the exchange industry;
building and capitalizing on the market data, technology and other
revenues appears to be a viable channelization of resources for
Moreover, the outlay of growth plan earlier this year -- by
dominant players such as
NYSE Euronext Inc.
CME Group Inc.
) through acquisitions, setting up of clearinghouses along with new
product and service initiations in the derivatives market -- have
already pointed out the swiftly changing dynamics of the exchange
industry. Such aggressive industry efforts are not only keeping the
company's management on its toes but are also directly threatening
its operating and competitive leverage.
Early Transition of Energy Swaps
In order to remain competent in the market, ICE plans to convert
its over-the-counter (OTC) cleared energy swaps and options to
futures by mid-October this year, ahead of the prior schedule of
January 2013. The before-schedule transition is based on the
heightened interest of the customers.
Accordingly, ICE intends to list its cleared North American
natural gas, electric power and environmental-based contracts on
the ICE Futures U.S. energy division. Meanwhile, the futures list
on ICE Futures Europe will now include cleared oil products,
freight, iron ore and natural gas liquid swaps.
However, all contracts will continue to clear at ICE Clear
Europe. The transition is expected to bring in more transparency to
the trades and is well-compliant with the regulatory norms.
ICE currently carries a Zacks #3 Rank, implying a short-term
Hold rating. We maintain our long-term Neutral recommendation on
CME GROUP INC (CME): Free Stock Analysis Report
INTERCONTINENTL (ICE): Free Stock Analysis
NYSE EURONEXT (NYX): Free Stock Analysis Report
To read this article on Zacks.com click here.