Bagging Elephants

It's easy to assume that many of the technologies developed for the cash markets-such as smart order routing, algorithms and transaction cost analysis (TCA)-can be leveraged for listed options. However, it important to remember that cash and option markets are different beasts: natural trades in the options markets are rarer and many trades involve capital commitment by a handful of liquidity providers.

When dealers look to create smart order routing and trading algorithms, they need to keep two

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