TECHNOLOGY SPOTLIGHT

NEW YORK--Merrill Lynch is laying the groundwork for the global deployment of a foreign exchange options trading platform, based upon the TradeIQ deal capture and position-keeping package from IQ Financial Systems.

Merrill Lynch plans to roll out TradeIQ to trading floors in New York, London, Singapore and Tokyo in a "tiered deployment schedule", says Robert Gregorio, the New York-based first vice president, senior director for global debt technology at the brokerage.

Approximately 50 traders will benefit from the new system, which replaces the internally developed "Optics" platform written in C++ and C, Gregorio says. The broker is expecting to go live with TradeIQ, version 3.1, running under Microsoft Windows NT by the middle of next year, he says.

Traders will be getting Compaq Computer PCs running NT, which will be supported by Solaris-based servers from Sun Microsystems, Gregorio says. An integration with Merrill Lynch's The Information Bus (TIB) deployment is also planned, he says.

"We felt that its shelf life had expired," Gregorio says of the Optics application, which was about eight years old. "It had limited functionality," he says, pointing out that it could not be used to handle exotics.

TradeIQ can be used for vanilla and exotic options and swaps, and it includes support for options modelling, a toolkit for exotic derivatives such as credit derivatives, as well as plug-in pricing models for complex derivatives.

With TradeIQ supporting multiple instruments, it's possible that the package could be expanded to other desks. However, that depends upon how the current deployment goes and the evaluations of other systems, says Gregorio.

The TradeIQ package is being deployed with the help of Chicago-based Derivatech Consulting.