Sunny South Florida weather awaits as Tim prepares to cover the Options Industry Conference for BST. He previews the gathering.
As an asset class, there's something plucky about options that has always appealed to me. Not nearly as behemoth as equities, and not mass-marketed in the way that futures are — FIA Boca and Chicago are true spectacles of commerce — the industry conference associated with options is a bit smaller, a bit humbler, and everyone seems to know everyone ... because, frankly, they actually do.
It was refreshing to discover this last year on my first trip to OIC. In 2014 the show was held at what could only be described as a luxurious dude ranch outside of Austin, Texas. Citadel even sponsored a beer-toting donkey, something I never thought I would see. Or maybe that's just the tequila tasting messing with my memory.
In any case, it was fairly surreal for someone who is used to Manhattan and its harsher brand of reality, but a complete delight to cover.
As I head back again next week, this time the location is Miami and the Fontainebleau Hotel, famous for its people watching. I rather doubt there will be as much kitsch involved — no donkeys, lazy rivers or horseback rides. But while the venue has changed, as it does each year, my first take on the agenda is that the issues really haven't.
These include the SEC's ongoing work with a tick-pilot program; the operational challenges and costs associated with listing and trading options across an expanding set of exchanges; the puzzle of designing options-based strategies and products that appeal to the institutional buy side, and of course, traditional matters of market structure and regulation.
Not to be left out, one new panel is also tackling cybersecurity for the space — the topic du jour that no conference can seemingly live without this year, though one I'll be interested to hear about given all of Waters recent work covering the subject.
More First Movers?
From a BST perspective, I'm hoping to answer a few more questions as well, and all of them speak to the idea that options is a market that should naturally grow, but where technology wherewithal is still highly compartmentalized and needs to be unlocked.
To name three: What work is being done to bridge the tech gap for buy sides that would seem primed to use options actively, but don't; how can vendors bolster off-the-shelf risk management platforms with deeper knowledge and better functionality for hedgers that is still largely lacking; and finally, what are new proprietary tools being commoditized today for cross-asset trading?
My takeaway from last year was that there is a ton of opportunity here, but not a lot of first-mover firms willing to plunge into what is still a relatively shallow and very difficult-to-understand space. Hopefully that particular sentiment was left in Texas.
Anyone attending OIC with thoughts and opinions on the above, or really anything related to options that we should ponder, should certainly feel free to reach out at [email protected] and we'll set up a meeting, preferably on the beach.
In any case, I look forward to seeing a few of the Waters crowd there.
James talks about his trip to Chicago and some of the interesting topics that came up (including a look at disaster recovery demands). Then Anthony and James touch on ISDA's initial margin rules, with Phase 3 going live next year.Subscribe to Weekly Wrap emails