Josef Schroeter Reflects on the CQG’s Transformation and the Evolution of Electronic Trading in Derivatives Markets

May 31, 2024

John Lothian

John Lothian

Executive Chairman and CEO

May 31, 2024

Part Two of The Path to Electronic Trading Interview with Former CQG President

Elmhurst, IL (JLN) – Josef Schroeter, the former president of CQG, shares his insights on the company’s journey and the evolution of electronic trading in the derivatives markets.

Schroeter joined CQG in the early 2000s at the invitation of Tim Mather, the owner of CQG at the time. Mather had built CQG into a company known for its data quality and analytics but lacking execution capabilities. Schroeter’s mandate was to transform the company and prepare it for the rapidly approaching shift to electronic trading in the derivatives markets.

In part two of this interview for The Path to Electronic Trading video series from John Lothian News, Schroeter discusses the evolution of CQG’s platform, from basic order tickets to multiple ways of entering orders, including off quote boards, charts, and price ladders. The company also prioritized risk management, hiring Mike Glista to develop a risk dashboard that catered to the needs of brokers and risk managers. Schroeter credited the late Geno Sullivan with helping CQG innovate its options trading offerings.

As electronic trading grew, CQG’s sales process became more complex, requiring the company to sell not just to traders but also to brokers and various stakeholders within firms. Pat Kenny, a key figure in CQG’s sales efforts, helped the company navigate this new landscape and expand its reach.

CQG also developed tools like custom algos and the auto spreader, which became a successful product for the company. Schroeter notes that the auto spreader was the first high-performance, fast trading technology deployed by CQG, elevating its credibility in the market.

Regarding intellectual property law, Schroeter discusses the defensive patent strategy adopted by CQG, focusing on designing around existing patents and leveraging the company’s ability to develop innovative user interfaces. He notes that while patents played a significant role in the industry for a time, the rapid pace of technology development eventually outpaced IP strategies, with traders constantly seeking new edges and innovations.

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