Veteran Trader Turned Exchange Executive Shares His Experience of Moving Cboe from Open Outcry to a Hybrid Trading Model
In a recent Zoom interview with John Lothian News for the JLN MarketsWiki Education Path to Electronic Trading series, Cboe Global Markets Chairman. President and CEO Ed Tilly shared the story of his start in the options industry and how that led him on a path towards electronic trading.
Tilly started at the Cboe in 1987 as a clerk working for legendary futures and options trader Steve Fossett. He spent time learning the business from Fossett and his team and finally became a trader for Fossett.
He joined a number of different Cboe committees, including the Equity Floor Procedures Committee, which helps determine how orders can be executed on the trading floor — at that time all through open outcry. He eventually was named chairman of that committee, serving while Cboe redefined itself as a hybrid trading floor.
Tilly was elected as vice chairman of the exchange by his peers, then joined the exchange’s management team in 2006 as an executive vice president hired by former CEO Bill Brodsky. He moved up to CEO in 2013 when Brodsky stepped aside and was elected to serve the additional role of chairman in 2017 as part of the Bats Global Markets acquisition. He added president to his title in January 2019.
He said he learned the importance of transparency, leadership and honesty from Bill Brodsky as they managed a changing trading environment for both members and exchange leaders. He also helped the Cboe respond to the competitive challenge presented by the International Securities Exchange, the first all-electronic options exchange in the U.S.
Tilly was part of the second generation of Cboe traders that was later replaced by more quantitative-focused traders. At the same time, its membership evolved from independent traders to include the biggest trading firms in the world.
The pandemic inspired the next leap in trading tools after the Cboe trading floor was temporarily closed in March 2020. The question of when the trading floor will be permanently closed will ultimately be up to Cboe’s customer base, Tilly said.