Diversity, inclusivity and creativity: how modern market makers will deliver on the UN’s Sustainable Development Goals

Diversity, inclusivity and creativity: how modern market makers will deliver on the UN’s Sustainable Development Goals

by | Nov 8, 2021 | Blogs

Interview with Ian Firla, Co-Founder and Director, OSTC Group

Q. The #WeAreMarketMakers campaign aims to give people a new window in the world of modern market making. What does modern market making mean to you?

Market making was, is and always will be about providing liquidity to the exchanges. About helping to reduce risk, and making markets more efficient. But from OSTC’s perspective, what makes market making ‘modern’ is who is doing that. It’s the shift from market making being a very generic and predominantly white male occupation, to one that is much more diverse and inclusive.

OSTC is proud to be at the cutting edge of that change with our global education programmes, which are all about introducing the job of market making to a much more diverse audience

“What makes market making ‘modern’ is who is doing that. It’s the shift from market making being a very generic and predominantly white male occupation, to one that is much more diverse and inclusive.”

Q. In your opinion, how does greater diversity within the market making community help to benefit financial markets?
At OTSC we are seeing a real democratisation in the trading space as more and more individuals are joining who are not from the traditional talent groups that have been recruited into the industry in the past. These new participants could be seen as a threat to current incumbents who are in the markets, but the reality is that they bring huge benefits with them.

These diverse new individuals will come with a multitude of views on the world and the industry, and a multitude of experiences. And with these views and experiences, we’ll see a further investment of creativity and diversity of thought that is going to make the markets become even more robust and stable. They will help us to innovate in order to achieve the Sustainable Development Goals that the UN is asking our industry to achieve in order to create a more sustainable world.

This big picture benefit is one of the reasons we are very proud of our global education programmes at OSTC which are all about introducing market making to talented individuals who may well not otherwise have had the opportunity to discover, or try it.

“New participants could be seen as a threat to current incumbents who are in the markets, but the reality is that they bring huge benefits with them.”

Q. You’ve talked about the benefits to the market making community, and to the markets, of introducing diverse talent. What are the benefits to the individuals who participate in your programmes like yours?
From our experience, we see a really wide range of benefits. First of all, when individuals participate in our programmes, the improved financial literacy they gain benefits them and their communities. They better understand the markets they operate in, and what drives them, and how global markets have an impact on them and their livelihoods.
More broadly, we’ve seen the impact measured by GVA that we have been able to make in countries like Poland where we were one of the first, and certainly the largest, proprietary derivatives trading programmes coming into the country. By enabling individuals there to learn about the markets and how to trade, we opened up opportunities that wouldn’t otherwise have been there. Individuals who took part in the programmes are now at the head of a very wide variety of financial services firms in Poland; in the front and back office. The GVA studies on our impact in countries like Poland, or Wales, have been incredibly positive.
Q. You and your teams must meet lots of aspiring market makers. What do you think it takes to be a great market maker?
Well, while we are often seen as a London based company, we have a presence across the world, from Poland to India, China to Russia, and Wales to the Ukraine. These might not sound like obvious places for a firm like us to be, but that is absolutely in line with our vision that anyone, anywhere can learn how to trade.
We believe that anyone with a sharp mind, who is good with numbers – and who has a desire to succeed, has what it takes to be a great market maker. You do need to understand risk, of course, but you certainly don’t need to be tied to a particular location.
At the moment we are exploring a push into Africa, which presents a fantastic opportunity. It’s an opportunity for individuals there to learn to participate in the global markets which have a direct impact on many African countries because of the products traded. Take cocoa, for instance, and the impact of commodities markets on a country like Ghana. And of course, it’s also an opportunity for us, and the wider markets, to benefit from the incredible talent there. There are upsides for everyone.

“We believe that anyone with a sharp mind, who is good with numbers – and who has a desire to succeed, has what it takes to be a great market maker.”

OTSC is a global derivatives trading firm and educator providing liquidity globally on most of the major exchanges. It prides itself in its inclusivity and diversity programmes.
For more information on OTSC visit: www.ostc.com
Meet the Institutional Trader, Tom Murphy (Maven Securities)

Meet the Institutional Trader, Tom Murphy (Maven Securities)

by | Oct 19, 2021 | Story

What is a typical day like for you?

A typical day for a trader involves a fairly early start. For me, this is just before 6am. I study what happened overnight, particularly in the US and Asia, before the European markets open. So when I arrive in the office, I already have an understanding of what has happened, and what the important events are that might be coming up in the next few days and weeks.

Then when the market opens, around 7am, I will engage all the electronic systems, make sure the phones are working and then start to stream my prices into the marketplace. Once trading begins, I will be observing what trades are happening, what prices and what instruments are being traded; and I will be looking at how all of this is feeding into risk and adding to our existing positions. I will be manually checking the automated decision-making to see if I think it is reasonable, as well as looking at our systems and how they are operating. 

Alongside this, I’ll be looking at what is happening in the world and I might also do some research projects or some coding. The day runs from 7am until 5pm and then once the market is closed, I’ll make sure all the trades are cleared correctly, review and write up the day and finish by around 6pm.

What is it about market making that appeals to you?

The appeal of market making is that it is a very complex and multi-faceted problem, with lots of ways to approach it and lots of ways to solve it. Alongside this, it’s also very immediately demanding. You have to price, take risks and be constantly present in the market. This is what creates such a buzz and a drive of adrenaline, that makes it a fun and interesting role.

“You have to price, take risks and be constantly present in the market. This is what creates such a buzz and a drive of adrenaline, that makes it fun and interesting role.“

How did you get into market making?

I always enjoyed maths, problem-solving, games and competition. I read up about trading and saw it involved those particular traits. Then with market making, it also added this layer of technology on top as well because it’s very code and developer driven. All of these combined made up my interests, and what led me here.


Tell us about who you work with? What are the other roles in your team?

There are the traders, like me, who are responsible for providing the prices, doing the trades and managing the risks. Alongside them are the Quants, who are responsible for providing the models to create the pricing. Then there are the data scientists who are responsible for finding, cleaning and providing the data that everyone can use. And lastly, there are the developers who are responsible for the coding. They ensure its production quality and working as it should be.

 

To find out more about Maven Securities visit www.mavensecurities.com

Lockdown restrictions liberated market making firms to reap the benefits of difference

Lockdown restrictions liberated market making firms to reap the benefits of difference

by | Oct 13, 2021 | Articles

Interview with Ian Firla, Head of Innovation, OSTC Ltd.

Q. The #WeAreMarketMakers campaign has been launched to help the world to better understand who market makers are and what they do. As a senior figure within a global market making firm, what would you want the world to know?

 

That market making is changing. It’s no longer that image perpetuated by the media and film, of traders in coloured jackets flailing their arms around. Yes, there are a lot of white men in the industry, but you don’t need to be one to take part. It’s really important for people to know that. You need a sharp mind. To be good with numbers. You need to understand risk. And you need a passion for the markets. But beyond that, it doesn’t matter.

There’s a growing focus now in this industry on diversity and inclusion in recruitment, and ensuring everyone has access to the right education opportunities. As a global proprietary derivatives trading firm and educator, I’m proud that OSTC is at the cutting edge of this. It’s a really exciting place to be.

“ You need a sharp mind. To be good with numbers. You need to understand risk.
And you need a passion for markets making may have several beneficial effects on markets. But beyond that, it doesn’t matter.”


Q. The first of FIA EPTA’s thought leadership reports for the campaign looks at how liquidity, and market making, changed during the pandemic. What effects did the pandemic have on you and the team at OSTC?

It’s been quite interesting to observe the impacts of the pandemics on the markets. There have been issues of liquidity, for sure. Though in our own experience, these have perhaps not been as profound as they have been for others.

But what we have found is that the pandemic has really emphasised the point that anyone can trade and do their job from anywhere. OSTC has had a programme allowing anyone to work from home, and we have found that it has really expanded and extended our latest recruitment drives. People who have been trained remotely, and developed remotely, are now operating as market makers and liquidity providers remotely.

In this respect, the pandemic has helped to emphasise that a well-trained and well-risked individual can do his or her job from anywhere. And that really liberates firms like ours to be able to recruit the best talent, and inject the best liquidity into the markets, from anywhere.

“The pandemic has helped to emphasise that a well-trained and well-risked individual can do his or her job from anywhere. And that really liberates firms like ours to be able to recruit the best talent, and inject the best liquidity into the markets.”

 Q. There can be a perception that market makers are just algorithms. How important is human direction in market making?

The human touch is extremely important in market making. It’s exactly why we have such a focus on recruiting diverse talent. If you have a group of people in your team who all think the same way, and are hoping to do the same thing, they will programme algorithms in the same way too. They will all point in the same direction.

The greater diversity of people you have within your team, the more creativity you get, and the more you are derisking what you do. Because you know that someone will always bring an alternative view point, in a way that they wouldn’t if you were only working with a group of very like-minded individuals. At OSTC we are really reaping the benefits of difference.

 Q. Given market makers, through liquidity provision, play an additive role in the markets and wider society, why do you think they were given a bad press in the past? 

Honestly, that has always been curious to me. Market makers are literally performing a function. We are providing liquidity, without which the markets would be a far riskier place for both the buy side and sell side to engage. In fact, the risk being introduced to markets without market makers’ presence would be highly amplified. Market makers help to make markets more stable, more secure, for everyone.

OTSC is a global derivatives trading firm and educator providing liquidity globally on most of the major exchanges. It prides itself in its inclusivity and diversity programmes.

For more information on OTSC visit: www.ostc.com

‘Liquidity in the Time of Covid’ – Download the report

‘Liquidity in the Time of Covid’ – Download the report

by | Sep 27, 2021 | Reports

Covid-19 continues to redefine the trading landscape in Europe. Changes in liquidity formation already in play due to the increased use of automated trading and rise of passive investing were accelerated
as traders rushed to make changes to investment strategies due to the pandemic. Remote working, greater reliance on cloud technology and the high volatility early in the pandemic created new additional challenges which is resulting in the industry rethinking trading partners and access points to liquidity.

The study is written by independent financial services research group Redlap Consulting. It was commissioned by FIA EPTA, which represents Europe’s leading market making firms, to drive greater understanding of what independent market making firms do, and their contribution to both financial markets and the wider economy.

Redlap Consulting conducted interviews with 30 Global Heads of Trading at asset managers with $35.6 trillion (€30.36trn, £25.9trn) in assets.

Report author Rebecca Healey, founder of Redlap Consulting, said:

“Covid-19 continues to redefine the trading landscape as the pandemic lifted the veil on the role market-makers can play in liquidity formation. Liquidity challenges in bond markets early in the pandemic created a vacuum forcing the buy-side, to find new trading partners and access points to liquidity – and market making firms stepped up to fill the void. Now as asset managers continue to partner more directly with these firms, they have been able to benefit from a wider, more diverse pool of counterparties in how and where they can execute investment strategies; while liquidity providers have the opportunity to re-position themselves and build new partnerships.”

The FIA European Principal Traders Association (FIA EPTA) represents Europe’s leading Principal Trading Firms. Its 30 members are independent market makers and providers of liquidity and risk transfer for end-investors across Europe. It works constructively with policymakers, regulators and other market stakeholders to ensure efficient, resilient, high-quality financial markets. To find out more visit fia.org/epta

The report is the first of three being produced to mark FIA EPTA’s 10th anniversary which is being marked by a new campaign to drive greater understanding of what independent market making firms do, and their contribution to both financial markets and the wider economy.

Download the report
#WeAreMarketMakers Campaign Launched To Promote Better Understanding Of Market Making Firms In Europe

#WeAreMarketMakers Campaign Launched To Promote Better Understanding Of Market Making Firms In Europe

by | Sep 27, 2021 | Press releases

London 27 September 2021

A new campaign to promote better understanding of modern market making, what it does and its benefits for wider society, has been launched today.

#WeAreMarketMakers is a campaign by FIA EPTA, the European industry body for independent market making companies, as part of its 10th Anniversary activities. The project is not only supported by FIA EPTA’s 30 member firms, but also by others in the markets community that work directly with and alongside the industry.

The campaign seeks to help inform and educate stakeholders on the important role that market makers play: from providing liquidity to the global financial markets, to supporting citizens’ pension pots.

It also aims to debunk some of the myths surrounding the industry, and put forward the people and innovators behind the industry.

The #WeAreMarketMakers campaign will be led through an integrated communications campaign and built around a series of independently-produced thought leadership reports looking into liquidity provision, innovation and sustainable finance.

The first report – Liquidity in the Time of Covid1 – is being launched next Monday with a panel discussion at the International Derivatives Expo (IDX) conference in London. It focuses on the impact of the pandemic on liquidity provision and how market makers played a vital role supporting asset managers.

The campaign will also create a new microsite about the sector, explaining what it does and its contribution, with news articles, blogs and videos as well as data and facts about the industry. The campaign website goes into detail about how market makers benefit everyone in society, from pensioners, farmers, businesses and even governments.

Notes to editors 

  1. Liquidity in the time of Covid – a report by Redlap Consulting 

“Our industry can sometimes be hard to grasp and our presence and impact is not always obvious – but we are always present in the markets and have been fundamental to the resilience of European financial markets, including throughout the Covid-19 pandemic.

We are excited to bring our ten-year run of engagement with stakeholders to a new level with this campaign, and are keen to reach new audiences to make them aware of the tremendous contribution of market makers to well-functioning markets that benefit everyone in society.”

– Mark Spanbroek, Chairman of FIA EPTA