Will Easley is managing director of Boston Options Exchange (BOX), which hosted the Options Industry Conference (OIC) last week in Weston, Fla. Easley joined the exchange as project manager in September 2001 and took the reins at the exchange as vice chairman last year. MarketsWiki’s Jim Kharouf spoke with Easley about the challenge of putting together a conference in the current market environment, where BOX is going next and where to eat in Paris.
Q: So you’ve hosted your first OIC and the conference had slightly over 400 attendees. How did it go, planning for such an event in the midst of a market crisis? (The conference is hosted by a different options exchange each year. This was BOX’s first year to host the event).
A: We were apprehensive on two different levels – financially because we’re responsible for the cost. There was also a concern about holding a conference in this environment. We thought about all the noise that was made about AIG’s conference. This is a market where appearances matter, so we were careful that the conference skewed heavily toward content. We also instituted breakout sessions so we could address more topics, more in-depth. Altogether it went well.
Q: Yes, I learned a new technology term during the tech panel – 10 Gig-e, which is a 10-Gig Ethernet.?
A: 10 Gig is big.
Q: BOX is no longer the youngest of the options exchanges, starting in 2004. Nasdaq Options Exchange is newer and there is talk of a new options exchange from BATS as well as another based in Miami, from former Philadelphia Stock Exchange executives. Where do you see BOX, going forward?
A: I always joke that holding 5- or 6-percent market share means that 94- or 95-percent is there for the taking. We’ve said over the years, we’ve had a number of constraints. We don’t have facilitation, block trading, a complex order book and don’t pay for order flow. But during the second half of this year, we will implement a facilitation, solicitation block trading mechanism. We should implement the basics of a complex order book before year end. This will let us compete in 30 percent of the market that we aren’t even present in at the moment.
Q: What impact has the market crisis had on the options market?
A: Parts of the effects are permanent and parts are temporary. You didn’t see commercial banks involved at all. Equity options was never going to be a massive business for them anyway but I think we may be seeing a shift, in general, toward professional market making firms. Countering that is a lot of proprietary shops with algorithmic trading. And what’s an algo trader? Basically it’s a market maker without the title. So human capital is redeploying.
Q: How did you get started in the business?
A: I finished school in 1982 and got a job working in options with a firm. No one there knew anything about options and I eventually transferred to London. In 1986-1987, I traded options on the floor of Monep in Paris and traded there for 12 years. They were actually the first exchange to automate its stock exchange, Matif, in 1988 and were able to shift lost equity volume back to the exchange because of it. So they said if it can work in equities, it can work in options.
In 1996, we sold the options market making firm I part owned. I then went to work for SBF, the parent company for Matif and Monep, pitching their trading platform, the NSC system, which actually means “new trading system” in French. My last project was pitching the system to the Montreal Exchange and we ended up helping them automate their trading system.
A: Right. Montreal was actually the second exchange to partner on the BOX project. Originally, it was Interactive Brokers, Boston Stock Exchange and (London International Financial Futures Exchange) LIFFE. But LIFFE dropped out and Montreal came in.
Q: You have a residence in France now. How did you wind up staying there??
A: My father was in the Navy and we moved a lot. It just happened to be that I was living in France when I decided I just didn’t want to move around anymore. I also live in Chicago.
Q: What do you like about living in France?
A: I do enjoy the energy of being a foreigner in a country I reside in. You tend to see things with a more acute eye.
Q: Paris and France in general are known for their restaurants. Which is your favorite?
A: Vaudeville. It’s an old brasserie that doesn’t close. It’s in an old grandiose building across from the French stock exchange building and is near the theater district. It’s not touristy and you’ll see all kinds of people there.