In making this announcement, Steve Brodsky, CEO, added “Ed has been critical to Spot’s success throughout most of its existence and an instrumental driver of the organization’s strategic direction, and is uniquely suited to effectively manage the operational, technological and human aspects of the firm.”  This news follows other changes to Spot’s leadership team announced earlier this year.

The Quant Trading Conference is a student run group which brings together a cross-section of the leading experts from academia, industry, and government in a low-key intellectual environment to discuss advances in quantitative trading and to strengthen ties across functions. Over 250 undergraduate and graduate students attended the conference from CMU, Columbia, Harvard, MIT, NYU, Princeton, UPenn, Yale and other leading universities. Spot was honored to speak at the event, and to network with students as part of the conference.

There was a selective registration process which resulted in over 100 undergraduates from 11 universities across the country invited to participate. Students received case studies in advance and worked in teams of three to four to create custom algorithms. Teams competed against each other in simulated market conditions for a cash prize. There were great networking opportunities for the students, and companies including Spot provided information about the industry and career opportunities.

To learn more about these changes, and for commentary from Rob and Steve, please see the announcement released February 7.

For Immediate Release
CBOE TO OFFER NEW CUSTOMIZED OPTION PRICING SERVICE THROUGH MARKET DATA EXPRESS – CBOE market-making firms bring price quoting expertise to daily custom options pricing service for the first time.

Chicago, IL – January 7, 2013 – Chicago Board Options Exchange, Incorporated (CBOE) announced today that its affiliate Market Data Express, LLC (MDX) plans to launch the CBOE Customized Option Pricing Service (COPS) on Monday, January 14. The new data service, which employs the market-making expertise of CBOE’s liquidity-providing community, offers subscribers end-of-day indicative valuations for “customized” options such as FLexible EXchange (FLEX) options and certain over-the-counter (OTC) options.

COPS was designed in response to requests from institutional investors – including mutual fund and hedge fund administrators and risk managers for insurance companies and custodial banks — that need to accurately price the value of custom options held in their portfolios on a daily basis. Many of these institutions are required by the U.S. Securities and Exchange Commission (SEC) to produce daily funds reports for their customers — measuring Net Asset Value (NAV) of funds held in their portfolios — by 4 p.m. Central time. COPS may help institutional investors more efficiently manage this reporting process.

COPS differs from other valuation services, which typically price options only by request, each using a single pricing model. By contrast, COPS, for the first time, will rely on robust pricing models of multiple CBOE market makers to help generate indicative values for as many as 3,000 options series on 300 underlying options classes each day. MDX will average the valuations submitted by market makers to MDX after the market close and provide COPS subscribers with custom data based on those averages each day.

“We are pleased to introduce our new options valuation service, which is unlike any other,” CBOE President and COO Edward Tilly said. “CBOE’s market makers continuously quote hundreds of thousands of standard options series each day. COPS is unique in that it applies this quoting expertise in standard options to customized options. The result is options values representing the collective pricing opinions of multiple, professional market makers.”

Initially, Wolverine Trading, Spot Trading and Sumo Capital, which collectively make options markets on nearly 2,000 options series at CBOE, will participate in the COPS program. They will price:

• All open FLEX options positions. COPS will provide indicative prices for all existing FLEX options positions on all U.S. options exchanges. FLEX options are exchange-traded options that allow investors to customize basic option features including the contract size, expiration date, exercise style and exercise price.
• OTC options. COPS will provide indicative prices for any OTC option requested by a customer as long as it has the same degree of customization as FLEX options, i.e., limited to plain vanilla options that have a customized strike price, expiration date and exercise style (American or European).
• Theoretical option prices. COPS will provide theoretical prices for a series of options, which offer indications of potential options prices for options that have not traded and are often used by traders to evaluate a security. COPS theoretical options series valuations, with one to 15-year expirations, will offer long-dated implied volatility insight that may be particularly valuable to institutions that have long-term equity liabilities. COPS will provide theoretical prices for the following six index options: the S&P 500 Index option (SPX); Nasdaq 100 Index option (NDX); Russell 2000 Index option (RUT); Dow Jones Industrial Average Index option (DJX); S&P 400 MidCap Index option (MID); and the MSCI EAFE Index ETF option (EFA). The strike prices and premiums for these options will be expressed in percentage terms, allowing subscribers to make simple day-to-day comparisons.

For more information on COPS, see www.cboe.com/COPS.

About CBOE

CBOE, the largest U.S. options exchange and creator of listed options, continues to set the bar for options and volatility trading through product innovation, trading technology and investor education. CBOE offers equity, index and ETF options, including proprietary products, such as S&P 500 options (SPX), the most active U.S. index option, and options and futures on the CBOE Volatility Index (the VIX Index). Other products engineered by CBOE include equity options, security index options, LEAPS options, FLEX options, and benchmark products such as the CBOE S&P 500 BuyWrite Index (BXM). CBOE is home to the world-renowned Options Institute and www.cboe.com, the go-to place for options and volatility trading resources. CBOE is regulated by the Securities and Exchange Commission (SEC), with all trades cleared by the OCC.

• Media Contacts: Gail Osten, (312) 786-7123, osten@cboe.com; Gary Compton, (312) 786-7612, comptong@cboe.com
• Analyst Contact: Debbie Koopman, (312) 786-7136, koopman@cboe.com

CBOE-OE

CBOE®, Chicago Board Options Exchange®, Flexible Exchange®, FLEX®, LEAPS®, CBOE Volatility Index® and VIX® are registered trademarks, and BuyWriteSM, BXMSM, COPSSM, SPXSM, and The Options Institute are service marks of Chicago Board Options Exchange, Incorporated (CBOE). Standard & Poor’s®, S&P® and S&P 500® are registered trademarks of Standard & Poor’s Financial Services, LLC and have been licensed for use by CBOE. All other trademarks and service marks are the property of their respective owners.

We sponsor charitable activities throughout the year for employees to get involved in, including the “JPMorgan Chase Corporate Challenge” in support of the American Red Cross of Greater Chicago, the “Hustle up the Hancock” in support of the Respiratory Health Association, and various tournaments in support of Hedge Funds Care, an organization supported by our industry to prevent and treat child abuse. Other programs Spot hosted in 2012 supported groups including Hephzibah Children’s Association, the Greater Chicago Food Depository, Special Olympics of Illinois, NextStep Fitness, Ravinia Reach-Teach-Play, Chicago Public Schools, and the Salvation Army.

An important part of Spot’s culture is our continual support of organizations in our community, and we are pleased to provide opportunities throughout the year for our employees to get involved in these efforts.

Spot’s internships are a mixture of classroom and hands-on learning where interns are paired with mentors to guide them through the 10 week program. Our goal is to introduce interns to our culture through working on real projects in the office and socializing outside of the office through coordinated events throughout Chicago. Our internships are paid and the students enjoy housing downtown Chicago, as well as complimentary meals.

Check out the rest of our on-campus recruitment trips happening over the next few months.

Spot’s leadership team believes that the success of the firm is directly tied to the satisfaction of employees.  As such, we strive to provide employees with challenging work, continuous education, excellent benefits and programs, and a collaborative, fun, and rewarding environment.  As Rob Merrilees stated, “Being named to this list in consecutive years reinforces that despite any external market challenges that exist, Spot remains consistently committed to providing employees with a rich overall work experience.”

Click here to read the full press release.

Ed’s panel focused on how someone can start a career in the options industry, and what is important to know about the industry for a newcomer. With years of experience in the trading industry, Ed and the other pane

lists were able to provide personal experience about the skills needed to be successful in the industry. For example, as the industry has changed, Ed pointed out that the profile of a trader has changed. Passion for the business, math and logic skills are still vital, but technical skills and interpersonal skills are critical to one’s personal success.

Over 200 attendees engaged with the panelists and the moderator, and left with new insights into how to approach the next steps in their career search. Ed also enjoyed having the opportunity to talk to the students more informally in small groups after the panel finished.

Banks are grappling to adapt to a wave of new regulations designed to rein in their trading activities and reduce risks associated with the $648 trillion privately traded derivatives markets that they dominate, which were a key contributor to the 2007-2009 financial crisis.

Recent scandals, including revelations that banks sought to manipulate the widely referenced London interbank offered rate (Libor) to benefit large derivatives trading positions based on the benchmark have even further eroded the trust of many investors in the banks, even under new regulations.

“There is no trust in the current sell-side orientated approach,” Clifford Lewis, an executive vice president at State Street Global Markets, said at a futures industry conference.

The Libor revelations show that the banks have “victimized” buy-side firms. “This is a transformational event.” Going forward, “I think the solution is going to be found in Chicago and the Chicago community. Not by Wall Street or (London’s) Lombard Street,” he said.

The word increasingly adopted for the transformation of the privately traded swaps markets is that they are being “futurized,” or made to more closely resemble the futures contracts so prevalent in Chicago.

This is not by accident. The approach of the chief U.S. derivatives regulator, the Commodity Futures Trading Commission (CFTC), in many of its new rules for the industry is to make the contracts more similar to exchange-traded contracts.

Key tenets of reform are: central clearing, electronic trading and price transparency.

CFTC Chairman Gary Gensler said on Thursday that Dodd-Frank reforms, passed in 2010 to regulate privately traded derivatives, borrowed from “what has worked best in the futures markets…

“The role of finance is to serve the rest of the economy. The futures market has done so for decades by providing price discovery and liquidity through transparent and competitive markets.” he said.

Chicago Mayor, and former White House Chief of Staff, Rahm Emanuel, who told Gensler he got the chairman’s job, said the futures markets maintained order when others were inefficient and ineffective during the financial crisis.

“The one place that did very well was the futures market,” he told conference attendees.

Higher margins required to back over-the-counter derivatives are already helping to push more business to futures.

Bill Brodsky, Chairman and Chief Executive Officer of the Chicago Board Options Exchange, said that the exchange has already seen a pick up in volumes from investors shifting from over-the-counter products.

The exchange is actively marketing its contracts, many of which can be customized, to companies including insurers and pension funds as alternatives to over-the-counter swaps, he said.

CME Group is also seeing an uptick in interest from customers seeking to transition to futures from swaps, though “right now they tend to be the smaller players,” said Kim Taylor, president of CME Clearing.

Meanwhile, a number of battles continue about over-the-counter derivatives reform, where many firms seeking to increase market activity say that the big banks are slowing and stymieing change in order to protect the lucrative revenues from the opaque markets.

This has been a delicate topic for some, as many bank representatives from New York have been unable to travel to Chicago to share their view this year because of weather-related transport shutdowns.

CFTC Commissioner Scott O’Malia declined to debate a contentious issue relating to rules over how quickly trades must be accepted by central clearinghouses at the Commission’s technology meeting in Chicago on Tuesday, citing the absence of bank attendees.

http://www.reuters.com/article/2012/11/01/futures-exchanges-trading-idUSL1E8M1AUS20121101

The panelists discussed how they are managing their current technology resources, and how they are planning for future needs.  All panelists agreed that it is important to be aware of the newest technology and tools available, but still make the best decisions for the business based on budgets and business plans.  Nigel in particular pointed out the importance of employees

in ensuring the firm is providing the best technology solutions.  The skills of Spot’s technologists, and the ongoing engagement they have with the business, often provide greater business impact than the newest technology available.  Nigel also talked about Spot as an “applied technology” firm, and the importance of aligning Spot’s technical resources to the firm’s strategic plan.

The audience appreciated the panelists’ opinions on how the changing regulatory demands impact technology decisions, and how they are responding to enhanced reporting requirements.  Nigel noted that Spot’s culture of compliance is an important tool in our highly regulated industry.  The panel provided an interesting end to the two-day Expo, leaving panelists and audience members with topics for ongoing conversation.

As part of this program, Spot was happy to welcome students from the Chicago Careers in Business (CCIB) program at the University of Chicago, Tulane University’s Freeman School of Business, Indiana University’s Kelley School of Business Investment Banking and Capital Markets program, and Northwestern University’s Financial Markets in the Global Economy class.

Hosting groups of students from various universities allows Spot to showcase our culture while also supporting the community. These events support Spot’s efforts to promote learning and career development, internally and externally. More schools will visit later this fall and throughout the coming year.

That’s how much those who graduate with an engineering degree can expect to earn over a 40-year career, according to new Census Bureau data.

Which major earns the least? Education, which comes in at $1.8 million. That’s even lower than arts majors, who can expect to earn $2 million.

Typical college graduates can expect to take home $2.4 million during their career.

The Census calculated this data by taking the median earnings for each group in various age increments between 25 and 64.

Of course, the occupation one selects can also have an impact on earnings. Engineers working in management earn $4.1 million over their lifetimes, while those working in education, only $1.8 million. Education majors who pursue computers or math jobs can earn $2.6 million, while those in the service sector make only $1.3 million — less than people with only high school degrees, the Census Bureau said.

Those with master’s degrees can expect to earn $2.8 million over their career, while doctorate degree holders take home $3.5 million. People with professi

onal degrees earn the biggest bucks, $4.2 million.

Biggest jump in U.S. wages in more than 5 years

There was more bad news for education majors in a related study the Census Bureau conducted. This field was the second most popular, with 8 million graduates, but the least likely to be employed full-time, year-round at 41%. Part of the reason is because teachers who do not work over the summer are not considered year-round employees.

The 12-million strong business majors, on the other hand, were among the most likely to be employed, at 64.1%. Computers, math and statistics majors, along with engineers, had even better employment rates.

On the flip side, fewer than half of visual and performing arts majors were employed full-time, year round. Same went for literature and language majors.

Women earned less than men in every field of degree. And earnings tended to be higher for those who worked in the private sector rather than the government, except for educators, where the reverse was true.

NEW YORK (CNNMoney) – By Tami Luhby @CNNMoney October 16, 2012 

The Spot team is also excited to be attending Northwestern’s Fall Job and Internship Fair on Tuesday, October 2, from 12pm – 4pm.  Spot has successfully recruited alumni from Northwestern’s undergraduate program and Kellogg for jobs in many departments throughout the firm.  Our partnership with the Kellogg School of Management Certificate Program for Undergraduates has given us a great opportunity to meet talented students through presentations, visits to Spot’s office, and on-campus recruiting.   Individuals from our trading and equity research teams will be at the fair, held in the Norris University Center at the Evanston campus.

Dan provided the audience with a useful perspective when he discussed some of the issues to consider when making technology decisions.  The ability to trade on multiple stock and options exchanges, understanding possible break-points in executing a trade, and considerations related to latency are important when considering the full spectrum of technology available.

No matter how much markets and rulebooks across the globe are changing, the need for speed is not going away; it is as persistent as it ever has been. Just in the past week, German and other EU regulators voted to implement a series of curbs to address concerns about high-frequency trading. You can expect other jurisdictions – namely in the US – to augment the debate, for the drumbeat of rhetoric to become louder and louder, and for additional measures to be brought to the front lines. In a period of deleveraging and the resource constraints it inherently fosters, you can bet that there will be lots of bogeymen to chase – real and imagined.

Yet, none of this changes the need for speed. Speed has always been a part of the story, always will be. (BTW, if anything, highly automated trading programs have done little more than replace the hundreds of floor traders that formerly captured “lubrication profits” in a prior era, but that is an entirely different commentary.) In fact, solutions for speed will continue to march forward in spite of the regulatory and economic headwinds that have seemingly put an end to what will eventually become known as the “Golden Age of HFT”. These solutions will continue to become smarter, cheaper, and, in some cases, faster – as they inch, microsecond by microsecond, closer to the barriers of the speed of light at lower costs.

This is because demand for latency-sensitive connectivity is broadening into new products and additional market demographic categories. It is no longer the exclusive tool of certain players. Speed is mainstream. All (institutional) market participants need to be concerned with optimized speed/TCO solutions to an ever-expanding and global spectrum of liquidity points for purposes beyond market data digestion, signal generation and execution. Higher-update risk measurement and new cross-product/cross-region strategy development are among the leading catalysts that come to mind.

On top of this, consider the super-driver

s of unprecedented regulatory transformation and economic uncertainty that will forge a newly transformed swaps market. Couple this with new hybrid and futurized product development to bridge the traditional swaps and listed derivatives markets, and we have a potential recipe for a lot of new strategy development off the backs of inter-liquidity plays in more regions. Further, consider that the Chicago-New York speedway is soon to become something more like the Chicago-New York–London–Frankfort–Singapore–etc. speedway.

Accessing market liquidity in an increasingly timely manner is set to continue to grow, not shrink. Once a risk-taking decision is made – whether it be primarily by low-touch or hi-touch methods – it is still going to be as important as ever to leverage speed to implement those decisions, even (and paradoxically) if those decisions are better served to be made over a period of time (since speed and time are not the same thing).

The next era of highly automated trading – a methodology being used in a broadening spectrum of strategies and employed by a broadening spectrum of market participants – will be more about addressing the latency challenges within a global, multi-asset market ecosystem, rather than mainly from Point A to Point B for a select list of products. And since we are no longer living in the version of Kansas where we can throw any amount of money at any number of connections, the whole ball of wax will go through an optimization process. The maximum amount of speed for the minimum total cost of ownership (which includes maintenance costs and onboarding and all that) is rising to the top of the priority list.

Now, add to this conversation the unfathomable performance requirements of today’s computational engines (i.e. – the stuff that goes on in concert with moving market data around) AND the fact that we haven’t even begun to discuss the oncoming wave of analysis around solving human latency issues (a topic which I personally hope to drill into in the coming months), and I guarantee that we are a long way from concluding our fascination with speed.

The conference offers a diverse setting where women will learn more about the current career landscape, build their network, and interact with top female business leaders. On Saturday the 29th, Libby Steigmann and Katy Leins from Spot will participate in panels discussing the financial industry, including the experience for women working in the field, and the unique points to know about securing a job in the industry. Also, Spot’s Tanya Patwa will be providing her expertise in a resume review workshop for over 500 women.

Spot Trading is proud to be a Bronze sponsor of the Harvard Undergraduate Women in Business organization, and we are honored to be included in the weekend’s events.  To learn more about IBC and HUWIB, visit http://ibc.huwib.org/.