Though time has seemed to stand still for many of us over the past 20+ months, the futures industry kept moving forward during these unprecedented COVID times. We may not be in the clear, but it was a breath of fresh air to reconnect with industry colleagues and friends and hear updates on the state of our industry at the 2021 FIA Expo in Chicago earlier this month. It was a busy and fulfilling few days, and I left with several key takeaways.
A highlight of the first morning was the return (in-person!) of the Exchange Leaders Panel, which aims to address topical issues, opportunities and challenges. It was clear from the discussion that the market is still searching for a way to clear trades more efficiently as the panel explored whether centralized clearing is the right answer for the industry. It was also evident that key market players continue to search for less expensive margining and transactional protection.
Three clearing models were explored – Prime Brokerage Correspondent, Direct and Sponsor – and each was judged for its ability to deliver efficiencies, operational management and (most importantly) better margins. The panel also explored additional critical industry priorities around balance sheet relief, repo relief and gross exposure.
It was wonderful to see so many female leaders participate in this year’s event and discuss their experiences in the industry, including Karey Baum-Pegasus of Commodities LLC and Liz Cook of the CME Board of Directors, both of whom took part in the WILD (Women in Listed Derivatives) sponsored panel. It was inspiring to hear about their professional journeys, the challenges they’ve overcome and how those experiences have shaped them and added to our rich industry. The entrepreneurship, integrity and creativity these women have demonstrated throughout their careers was clear to see – and a good lesson for all of us, regardless of gender. The speakers each echoed a common theme – a determined focus to continue moving forward and creating a path for more opportunities for women in our industry, which is exciting for us all and foreshadows and even brighter future to come.
I thoroughly enjoyed hearing industry veteran Leo Melamed, chairman emeritus of CME Group and a pioneer of financial futures, whose love affair with the futures markets has shaped the world we live and operate in today. It was wonderful to hear him share his perspective and stories on the evolution of electronic trading. If you’re not familiar with his amazing life story I encourage you to read up on him. His journey began with a difficult childhood in Poland at the outbreak of World War II and continued as his family moved through numerous countries and he was forced to adapt to multiple schools, languages and more on the road to his remarkable future.
He recalled someone once saying to him, “The way you can tell if the product is good is if it has customers. It proves it’s something people want.” This proves what we all know: the product is paramount. That’s what people want – and as he says, “Futures markets are a damn good product.” This is a man who was instrumental in changing the rules to allow women on the floor in 1976, and ultimately helped shape how the CFTC and futures markets operate today. He also shared that he thinks currency futures are a great idea, and he credited the idea for GLOBEX to the kind of science fiction that he had only dreamed of in his head. As he sees it, “Technology will take over” – and we are all witnesses to this truth.
As with many industry conferences these days, there were several interesting crypto market structure discussions. The consensus seemed to be that this is still an immature, 24/7 market that had its beginnings in retail trading and still sees very high volumes on the weekends. There are no prime brokers in this market, and lingering questions remain around back-office operations.
I’m hoping to be back with more industry observations before long as the events calendar is finally looking bright again!
Senior Relationship Manager