The Security Traders Association, acknowledging the growing importance of options to investors as well as its membership, is launching an options committee. The committee was OK’d by the STA board at its January meeting in Chicago, along with a similar group that will look at order routing in equities.
David Mortimer, chief executive of 3D Markets, was named head of the options committee. Keller Reid of Penson Financial Services and Brian McCarthy of Vanguard Brokerage Services were named co-chairs of the order routing committee.
Both committees will look at the evolving issues traders face in these areas. And both will use the STA’s Trading Issues Committee as their model, holding monthly conference calls, featuring speakers and airing open discussions of issues. The Trading Issues Committee’s last major undertaking was an extensive study of dark pools and how they operate. Industry veterans Peter Driscoll of Northern Trust and Tony Sanfilippo co-chair that committee.
John Giesea, STA president and CEO, pointed to the growth in options strategies among equities traders as one reason for the new options committee. In addition, “the lines are narrowing between the two equities vehicles, and that’s exemplified by the ISE and CBOE now trading stocks,” he added.
Besides the committee’s educational responsibilities, Giesea said STA could benefit by spurring membership growth among options traders–a group it has paid increasing attention to of late. In recent years, the Security Traders Association of Chicago’s annual meeting has featured numerous panels and workshops on options and the trading of options. “We don’t expect to become the options industry’s organization, but it is certainly an area we should be involved in,” Giesea observed.
Mortimer, who has launched a crossing system for options, said he expected a group of between 15 and 20 people on the committee. They will likely represent a wide range of options users, including institutional clients and brokers, as well as those in retail brokerage. “My plan is to get a good group,” Mortimer said, adding that he is amazed at the continued growth rate of options trading among institutions.
“We’ll look at some of the issues that we are familiar with from the equity world, including size discovery vs. price discovery,” he said. “These are issues that need to be addressed by a working group of professionals.”