Patty Kevin-Schuler was recently named the new vice president of sales and marketing at the Boston Options Exchange (BOX). She spoke with Sarah Rudolph about her new role there as well as her role as president of Security Traders Association of Chicago (STAC).
Q: Congratulations on your new position. Can you tell me a little about your background? You were most recently director of business development for CBOE and CBOE Stock Exchange. What about before that? Where did you get your start?
A: I started in 1986 working for a broker-dealer on the CBOE floor. I worked as a runner and worked my way up to institutional retail sales phone clerk and then floor manager. So I grew up in the trading environment and learned all aspects of that business from trade execution to clearing and settlement to developing options trading software. I was working with the market maker trading environment. It really gave me a well rounded experience and helped me in forwarding my career.
While at CBOE, we worked with an outside vendor on a trading platform for options users. The developers needed to understand options trading to make sure the platform was viable for CBOE options customers. We brought our ideas to fruition and sold the platform to various CBOE customers who needed access to the options exchanges. While I was there I marketed the trading of complex strategies with stocks (for example in a buy-write). Customers had the ability to trade complex strategies, but not the ability for the option/stock combo to trade on a single platform. One reason we launched CBSX was for the strategies to trade electronically.
Q: How do you envision your role at BOX? What will be different there compared to your role at the CBOE?
A: I will be focused on continuing and expanding client relationships. Making sure that the clients needs and expectations are met. And of course I will also work on bringing in new customers who are either just starting in the options business or haven’t really explored the BOX offering. I don’t see too many differences between my role at CBOE and my new role at BOX.
Q: What are the benefits of trading on BOX?
A: BOX offers a high rate of price improvement and we have a unique pricing model which rewards liquidity takers. That is the opposite of the maker-taker model many exchanges have — we had the maker-taker model at CBSX so I am familiar with differentiating yourself from a traditional market model. It doesn’t fit for everyone but it does fit a specific group. We focus on the retail side, but we also need to make sure the institutional side can benefit as well.
The industry generally agrees that the expansion in options will probably come from the institutional side over the next couple of years. Retail will always be there, but right now we are focusing on bringing in the institutional side.
Q: You are also the current president of the Security Traders Association of Chicago and have been involved with them for many years. Could you describe your role in that organization?
Because I am currently the president of STAC Chicago, that gives us [at BOX] good exposure to different areas of the securities industry — including a lot of sell-side and buy-side firms, options, equities, and futures. My role at STAC gets me out there attending conferences, meeting different people and talking about BOX and industry initiatives.
Q: Did anything in particular stand out from the most recent STAC conference a few weeks ago?
A: I enjoy the conference a lot, and the fact that we get so many people at that conference is a testament to that organization and the people involved in running it. We get a thousand attendees, whether they attend for one day or both days. It’s really a good mix of customers, exchange people, regulatory people – the whole financial services group of folks.
The image of STAC is changing. People used to think of it as just equity traders, but I have really pushed hard to get options folks more involved and I’ve seen that [market] grow exponentially over the last 7 or 8 years. We’re seeing a lot of crossover from equity traders getting involved in options.
Q: Yes, the first day of the conference was almost entirely focused on options.
A: We tend to split it that way: day one, options and day two, equities. It used to be more haphazard, but we heard back from surveys of attendees who asked if we could block off one day for options and one day for equities.
A: The industry believes there will be consolidation, and these announcements ring true in that regard. It’s a question: consolidation vs expansion, where is it all going? It will be interesting to see how the next year plays out. I hope my role will be to help grow and expand our existing client base and increase our market share and continue to be a profitable exchange. The BOX folks have been great and I am looking forward to working out with them. Everyone has been really helpful.