Recent Episodes
August 17, 2023
The Impact of Options Activity on US Stock Trading
Episode Double Nickels (55) of Bid Out dives into the deep end of US options market structure with two experts, Dave Kovtun from Jane Street and Paul Jiganti of IMC Markets. The goal of this podcast was to educate equity traders and portfolio managers about the information content of options activity and related impact on the underlying securities. Listeners will learn about recent market moving options activity in the S&P and some less liquid US stocks, and what it means to have single stocks expire during the week, in addition to once a month on the third Friday. Paul and Dave tamp down any chatter that 0DTE trading might lead to a so-called Volmageddon 2 event, as potential land mines from option market maker rebalancing are well known to the Street. Dave does an excellent job explaining how market makers hedge options risk and how the lack of homogeneity in hedging strategies leads to more liquidity in the market. Paul and Dave finish with some suggestions for improvements to options market structure, a space that has not garnered a huge amount of regulatory attention in recent years.
July 21, 2023
Identifying Fault Lines in the Equity Market Ecosystem
In Episode 54, we tackle the complex and not well socialized topic of fault lines within the equity market infrastructure. When system problems occur, market participants scream for a day and then go back to business when normalcy returns. This begs the question: is there enough post mortem analysis of system issues at the overall industry level and why does this post mortem activity remain primarily behind the scenes in Canada? Our guests for this episode are two experts in market infrastructure - Etienne Phaneuf, CEO of ArchES Computing and Stephen Plut, Managing Director and Co-Founder of ITS Online – and by the end of this episode, we hope all our listeners are better educated on system complexity and some of the risks to future market stability and resiliency.
June 12, 2023
The Evolution of Liability Driven Investing
In Episode 53, we cross the mote to the other side of the balance sheet and discuss liability management by pension funds, popularized by the term Liability Driven Investing (LDI). We are joined by Bill Chinery, an actuary and former asset management executive with pension fund expertise as well as Frederic Kibrite, an asset-liability specialist from TD Asset Management. Bill and Fred discuss the evolution of LDI from the early days of pension fund management in the mid 20th century all the way to the celebrated blow up of the strategy in the UK in 2022 that ultimately cost Prime Minister Liz Truss her job. Bill discusses Canada's celebrated pension system which, despite its strengths, cannot fight inevitable demographic challenges caused by lower fertility rates and an aging populations. Fred finishes up with advice to governments in dealing with pension fund demographics – act early!
May 17, 2023
A Deep Dive on new ATSs OneChronos and PureStream
Episode 52 is a detailed discussion unpacking two new ATSs in the US that offer solutions in the US market to help manage the complexity of liquidity discovery. In order to unpack this discussion, we call upon the CEOs of PureStream and OneChronos, industry veterans Armando Diaz and Vlad Khandros. In this episode we learn about the key tolls built into the new ATSs to help solve institutional trading problems, not the least of which is the search for size in a marketplace with liquidity fragmented across 16 exchanges and over 40 ATSs. Be sure to stick around to the end of this episode to hear Armando and Vlad's takes on the SEC proposed equity market structure reforms.
January 26, 2023
An In Depth Look at Global Index Issues
In episode 51, we feature an excerpt from our Portfolio Management and Market Structure Conference that was held on November 3, 2022. In this panel discussion, we brought together index benchmark experts from S&P, MSCI and FTSE to discuss important issues impacting global benchmarks, including capacity limitations of ESG oriented indices. Other important topics discussed include multi voting share eligibility, whether China should be proactively moved to a Stand Alone status, differences on South Korea classification and rule proposals to insulate the S&P 500 from the next Tesla.
January 19, 2023
What to Make of 1656 Pages of SEC Proposed Market Structure Reforms
In Episode 50, we bring together an all-star cast of market structure experts to dig into the SEC's proposed equity market structure reforms. Our guests first try to explain what the SEC is hoping to accomplish with its proposed rules, and what changes, if any, Canada will need to mimic. We then tackle several of the important proposals in detail including tick reform, access fees, new round lot definitions and the relevance of the NBBO, order transparency, retail auctions and best execution. We finish with musings over bargaining chips the SEC can dangle to get some of the most important reforms across the finish line, because it is not clear if all of these rules will survive industry scrutiny and potential litigation.
December 8, 2022
What Institutions Need to Know about Digital Assets in a Post FTX World?
In episode 49, we explore the future of digital asset technology in a post FTX world. Our guests, Mark Garabedian from Wellington Capital Management and Jeremy Lai from TD Securities, take us on a journey of discovery on what went wrong with FTX including differentiating decentralized from centralized finance and share their thoughts on the comments of FTX's former CEO, Sam Bankman-Fried during his recent apology tour. Along the way, Jeremy and Mark explain the institutional use cases of distributed ledger technology in capital markets and how far along the infrastructure providers are, solving table stakes issues such as KYC, AML and cyber risk. Mark finishes with a review of his peer group on the buy side, indicating that Wellington is not alone in its support for digital ledger technology and its potential to change the infrastructure of global capital markets.
July 28, 2022
The Gensler Market Structure Agenda
In Episode 48, the second part of our two-part series on options and equity market structure, we are rejoined by Andrew Shultz, Head of Strategic Options Business at Susquehanna International Group, and Mett Kinak, Global Head of Equity Trading at T. Rowe Price Group. In this episode, Mett's feet are put to the fire with respect to SEC Chair Gary Gensler's proposed equity market structure reforms. Mett weighs in on whether auctions modelled after options market structure can be repurposed for retail equity trading. He also raises concerns about potential tick increment reforms, proposed changes that should steer away from one-size-fits-all solutions, and the harmonization of traded prices across all types of venues. Mett concludes the episode with his thoughts on the Gensler agenda from the D.C. Circuit's recent decision on market data governance. Listen in to understand how this decision could be viewed as an ominous cloud over market structure reform.
July 22, 2022
Options Market Structure and the Mechanics of Retail Auctions in Options Trading
In Episode 47, the first of a special, two-part series, we dive into market structure with Andrew Schultz, Head of Strategic Options Business at Susquehanna International Group. We are also joined by Mett Kinak, Global Head of Equity Trading at T. Rowe Price. Together, we discuss the nuances of options trading, as well as the mechanics of auctions for retail orders. Auctions is a hot topic in equities market structure, especially given SEC Chair Gary Gensler's recent comments on options auctions and order competition. In the second part of this series, we will analyze Gensler's remarks at the Piper Sandler Global Exchange Conference, including his high-level plans for equity market structure reform.
June 3, 2022
European Equity Market Structure 2.0
In Episode 46, European market structure expert Niki Beattie provides an update on key topics of interest in the UK, and across the continent. Listen in as she addresses the evolving discussion on the consolidated tape debate, examines the post-Brexit listings battle between Amsterdam and the London Stock Exchange (LSE), explains how the continent and the UK are diverging on Markets in Financial Instruments Directive (MiFID) rules for dark trading, and more.