Our Chicago Summer Intern Series kicked off with a packed auditorium at IIT and five lively speakers, who all spoke about their passion for the trading industry. Scott Gordon, the CEO of Rosenthal Collins Group, was up first with some tips for interns on success and balance in work and life. These included checking out the view from 30,000 feet – looking beyond your particular job to know the major players, products, drivers and interactions in your industry; asking questions rather than knowing all the answers; pretending you are a taxi, which zigzags around and doesn’t know where it’s going next, rather than a train which has a set route and schedule; and not making assumptions.
“I was a floor clerk at the CME 44 years ago this summer,” Gordon said. “I worked on all the Chicago exchanges, and all were like a taxi ride. There was no way I could have told you what I would do next.”
His top recommended reading was Improvise: Unconventional Career Advice from an Unlikely CEO, by Fred Cook, and The Checklist Manifesto by Atul Gawande.
Derek Sammann, senior managing director of commodities and options at the Chicago Mercantile Exchange, talked about macro trends in the financial industry – electronification and globalization – and how they have changed traditional roles such as market making and opened up opportunities for new entrants. Back when he started out, he said, trading firms would hire football players just out of college because of their size and loud voices. Those criteria today are replaced by the technology skill set.
Also, the role of the banks is changing. Banks, which were known as the “sell side” because they provided liquidity, are now more like the buy side, because they are liquidity takers, Sammann said. And the market maker role has been replaced by server farms.
“Liquidity is now provided by different firms, with very different skill sets,” he said.
Globalization, driven by electronification, has opened up access to the markets to people all over the world. “Customers interact with our markets who have never seen Chicago,” he said.
Ed Boyle, CEO of BOX, also talked about the revolutions brought about by technology – particularly the Internet, which has been the biggest disrupter since the industrial revolution.
He spoke about the disruption in the industry caused by the financial crisis of 2008 and the subsequent regulatory overhaul, and said it’s important to know what drives the change in your business.
“Never be satisfied with the status quo,” Boyle said. “The disrupters in an industry are the ones who succeed.”
In an interesting twist, given the radical shift from the culture of the floor to the high-tech nature of today’s markets, Katie Burgoon, vice president of human resources for Trading Technologies, spoke about how the floor trader’s mentality can prepare anyone for success. She also talked about being one of the few women on the trading floor when she started out, and the under-representation of women in the financial industry, noting happily that the audience of interns was pretty evenly distributed between genders. Although she said she thought the culture of the trading floor had been one of the major reasons for the dearth of women in trading, she said there were three important tips one can learn from the floor traders: to follow your passion, ask for what you want, and to be confident enough to speak up and offer your opinion.
“You don’t want to ever feel complacent,” she said. “Technology is about out of the box thinking. Integrate what you love into your livelihood. Traders lived and breathed the markets every day and couldn’t wait to get onto the floor.”
John Fennell, executive vice president of financial risk management at the Options Clearing Corporation (OCC), talked about the opportunities in clearing, which he said “goes on behind the scenes but is critical to the operation of financial markets.” He explained that clearing is settling a trade between two financial intermediaries, and said that of the two key components of clearing – the settlement of a transaction and the guarantee function – the guarantee function has become the critical issue after the 2008 financial crisis and the collapse of banks like Bear Stearns.
“I’ve not seen any other area in financial markets where they can innovate as fast as at the clearinghouse,” Fennell said. “Innovations are crucial to the whole structure.”