Proprietary trading (prop trading) occurs when a firm trades stocks, bonds, currencies, commodities, derivatives, or any other financial product, using the firm’s own money. The goal is to earn a return on capital for the firm as opposed to any external customers of the firm. Many strategies, including index and statistical arbitrage, long/short equity, volatility arbitrage and global macro are common amongst proprietary trading firms, in addition to many other internally developed strategies.
A market maker is a specific type of liquidity provider as designated by registration with an options exchange. A market maker is obligated to post two-sided quotes across a minimum amount of series and symbols as determined by specific exchange rules. In exchange for providing liquidity, market makers receive certain benefits such as priority of trade allocations, reduced exchange fees, and favorable treatment of regulatory capital.
Derivatives are financial contracts entered into by two or more parties that “derive” their value based on the price of an underlying security. Derivatives usually specify conditions (such as dates, values of the underlying, notional amounts) under which payments are to be made between the parties. The most common types of derivates are options, futures, swaps, and are usually traded on an exchange or over the counter. Derivatives can be used for speculation (“bets”) or to hedge (“insurance”).
The options market is made up of a wide variety of participants, including retail customers, institutional investors, hedge funds, pension funds, wealth managers, market makers, proprietary trading firms, high frequency traders, and speculators.
Spot seeks to earn returns on its own capital through a variety of volatility based arbitrage strategies. Spot has no customers or outside investors. We utilize our own proprietary ideas, software, and research to deploy our capital. We are not restricted by any external shareholder or investment charter that dictates how we can trade. This allows us to be flexible in evolving our strategies to meet opportunity in the market and is a source of competitive advantage we have versus larger firms in the industry.
Spot trades the entire US listed equity and Exchange Traded Funds (ETF) market, numbering over 3500 individual underlying securities. We also actively trade the entire complex of volatility based and volatility linked derivatives. In addition to these products we are active in several of the commodity futures and options markets.
Spot is a member of nine exchanges: CME, CBOE, CBOE/C2, NASDAQ PHLX, NYSE/Arca and NYSE/Amex, BATS, BOX, and ISE. Spot also actively trades on other options exchanges in which it is not a member.
Yes, Spot is a registered market maker on the NYSE/Arca, NYSE/Amex, and CBOE exchanges for a variety of ETF and equity products.
Spot has been successful in combining on-floor and off-floor traders working together in products where floor trading provides a meaningful percentage of the market volume. For those markets that are fully electronic, we manage and execute trades directly from our office in downtown Chicago.
Spot relies on constant innovation in technology, low-latency networks, and algorithmic trading platforms that allow us to access the markets in a highly efficient manner. In addition, we successfully manage strategies that allow us to hold positions for longer durations, relying on risk management systems to help us earn higher returns on trades.
Trends in electronic and algorithmic execution continue to become more prevalent in the market, and we continue to evolve our trading strategies in that direction. However, short of being a black box trading firm, we believe that there is a strong need for human guidance as an input to our electronic trading systems. There will always be certain market scenarios that humans can price more effectively than machines, and this integrated approach has been key to our success.
Our Chicago office is our only office. Chicago has long been at the center of the derivatives industry and a leader in the evolution of risk management. In recent years, Chicago has also been home to the growth of many proprietary trading firms.
Our technology platform is a collection of services and applications that enables us to scale and innovate with minimal effect on other parts of the system. We use Agile development methodologies that allow for short release cycles to provide rapid business feedback. With the market increase in algorithmic trading strategies, automated testing and Quality Assurance processes have become increasingly more important to manage risk and complexity.
Spot relies heavily on a large internal team of architects, developers, network specialists, QA analysts and data experts to develop most of its own software for proprietary use. While the majority of the system is built in-house, we do buy best-of-breed components or utilize open source solutions for the application infrastructure including messaging and core libraries. We primarily develop in C#, C++, or Python, running alongside Windows and Linux.
Spot prides itself on providing a collaborative and innovative work environment that allows employees to impact and contribute to the success of the firm from early on in their careers. Our education team provides exceptional learning and development opportunities for employees to expand their skills and enhance their development. It is also important to us that employees enjoy their work and have fun participating in social activities together outside the office.
Spot highly values our people and provides them and their families with competitive benefits and perks such as health insurance, complimentary breakfast and lunch, wellness programs, 401k plan, professional development, etc. Click here to learn more about benefits at Spot. In addition, Spot provides a variety of philanthropic opportunities for employees and their families to participate in.
We are always looking for passionate, talented individuals in all competencies across the firm. Whether as a full-time trader, software engineer or support intern, we encourage you to apply if you are up for the challenge. Submit your resume for current opportunities or for general submission.
Yes, we travel to the top universities and colleges across the country every year. Click here to see if Spot is coming to your school and learn more about our STP Training Programs and internships. Don’t see your school on this list? Students are always welcome to apply directly online.
Spot’s recruiting team reviews every resume that is submitted. If your qualifications are a match we will reach out to you directly when appropriate. If you are not a match for a current opening, we will keep your resume in our online database for future opportunities.
In 2013, Spot was honored to be named one of the Best and Brightest Companies in Chicago for the third consecutive year. We believe that we provide employees with the programs and experiences that rival large employers, while maintaining an environment that still supports collaboration, innovation, and lasting relationships.
Learn more about the benefits and programs Spot provides to our employees and their families.Read More