STAC Mid-Winter 2018 Summary

Blue Trading Systems News, Events, and Highlights


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Blue Trading Systems attended the 92nd annual Securities Traders Association of Chicago’s (STAC) Mid-Winter Meeting last week in Chicago. Exchange representatives, technology providers, trading firms, hedge funds and industry professionals gathered to discuss issues impacting our industry. Hot topics included cryptocurrencies, low volatility in the markets and corporate responsibility.

Cryptocurrencies

Least surprising, one of the most well attended panel discussions was a conversation on cryptocurrencies led by Bcause’s Sean Ristau. Mitigating risk was a main theme as panelist Michael Mollet from CBOE Global Markets admitted that they chose to align their new Bitcoin futures contract with the licensed digital asset exchange and custodian, Gemini, because it is a regulated entity. Launched by the Winklevoss twins, Gemini is a New York trust company regulated by the New York State Department of Financial Services. It is subject to fiduciary and capital reserve requirements as well as cybersecurity and banking compliance standards.

The Commodity Futures Trading Commission has also approved trading of Bitcoin as a new asset class but that doesn’t eliminate issues dealing with the definition of a cryptocurrency, tax implications and market manipulation concerns. While this may be a lucrative market, many traders are still in a wait and see mentality as regulatory authorities work out the kinks.

Trading Signals

Jerry Hanweck from Hanweck moderated a panel looking at trading signals and how traders are finding direction in low volatility markets. Panelist Mike Wisnefski from the Materials Exchange talked about the different approaches experienced traders have compared to the new generation of traders such as quants and robots. Wisnefski advised that experienced traders will have a leg up if they think differently using old school methods.

The panelists also touched upon the importance of extracting information from data and looking at alternative sources for trading signals. The panlists couldn’t pinpoint where to look for alternative data but said that this is non-conventional information like sentiment data, personal anecdotes, or deriving data from one market and applying it to another. As the markets adapt to new entrants, it seems even a birds eye view of a parking lot and when cars are parked there could be used to extract alternative data.

Corporate Responsibility

The conference also included a fireside chat with Silvia Davi from Thesys Technologies in an intimate conversation with Patsy Doerr from Thomson Reuters. They addressed the need for gender diversity and inclusion within the financial industry. Davi provided context around the issue reporting that about only 5% of CEOs of Fortune 500 companies are women. Doerr was optimistic in saying that the financial industry is gearing up for a transfer of wealth in the next few years and that women will be the primary decision makers when it comes to finances and investments. In fact according to Business Insider, by 2020, women will control $22 trillion in investable assets.

Conclusion

The STAC Mid-Winter Meeting was a great place for BTS to visit with industry colleagues and hear about the new challenges and opportunities facing our industry. The markets are evolving, there is no doubt about that. We have new asset classes that excite but scare some participants, we have traders forced to look at unique venues for trading signals as well as a transfer of wealth that may shift the corporate mindset to be more inclusive of gender diversity. All in all it was a great gathering that addressed thought provoking issues and we look forward to our further involvement with STAC.

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