WILD about Options: Educating Women on Options Trading

WILDPanelContributed by Jessica Titlebaum, Marketing Director, Americas at Orc and President of Women in Listed Derivatives

The derivatives industry is evolving due to regulation coming from Washington and it’s forcing participants to look at different opportunities in new markets. To help emerging and experienced women navigate these broader territories, Women in Listed Derivatives (WILD) organized an educational seminar on Options trading.

Hosted by NYSE Euronext and sponsored by the Options Industry Council and Fidessa, the workshop included an educational introduction to Options trading, a keynote speaker about career advancement and panel discussion focused on the current market environment.

Options Trading 101

Allison Jacobs, member of the WILD Membership Committee and former American Stock Exchange Options floor trader, opened the event with a session focused on the rise in popularity of Options trading. She also pointed out the resources available to traders.

Jacobs explained that Options trading started in 1973 and are financial instruments that convey the right, but not the obligation, to buy or sell another financial instrument or asset at a specific price within a specific period of time. These contracts provide risk management in volatile markets and also provide the opportunity to increase returns.

They have been very successful since their launch. To put growth into perspective, in August 2011, there were 550 million options contracts traded, which was the same amount of contracts were traded annually in 1999.

The industry saw 4 billion contracts traded in 2012. 2013 has so far seen 13.1 million contracts traded daily. From that volume, about 10-15% can be attributed to “weekly” options contracts; these contracts expire every seven days. They were launched in October 2005 and have grown to include 175 stocks/instruments participants can trade.

Jacobs explained that options contracts are cleared through the Options Clearing Corporation. By acting as the guarantor, they ensure that contract obligations are fulfilled.

The Options Clearing Corporation, along with the 11 options exchanges, funds the Options Industry Council (OIC). The OIC provides online options classes, thorough trading data, pricing calculators and access to free equity options information; among other resources.

Career Advancement: Celebrating Your Differences

Next up, the agenda featured Amy Farnstrom. Farnstrom, stationed in San Francisco, is a senior vice president of business technology and head of product strategy for the U.S. options business at NYSE Euronext. While she certainly acts the part, Farnstrom may not look like your typical senior executive. This was evident in her session that gave the audience a new perspective on their careers.

Farnstrom emphasized that there is a difference between who you are and what you do. She explained that our careers don’t define us. They are only one part of us.

“Stop looking at the tree and explore the forest,” she said, standing at a podium at the front of the room. She was wearing a short sleeve shirt that quietly revealed the edges of her shoulder tattoos.

Farnstrom’s advice to women was to make a plan. Starting with a mission statement, she told the all-female audience to define your life’s purpose. Then clarify your values and passions. Identify your goals. Become involved with related projects and finally act on your initiatives.

Farnstrom relied on quotes such as one from Albert Einstein to get her point across: “Imagination is more important than knowledge. For knowledge is limited to all we now know and understand, while imagination embraces the entire world; and all there ever will be to know and understand.”

She also shared a quote she wrote to her daughter about embracing who you are.

“If you celebrate your differences, the world will too. It believes exactly what you tell it.”

Farnstrom concluded by reminding women to bounce ideas off each other, find ways to connect and most important, to bring your own perspective to the table.

Regulatory Impact on Today’s Market

The final session featured Joanna Fields, head of equity market structure for the Americas at Deutsche Bank, Joy Rosenstein, business development director at Fidessa and Meaghan Dugan, director at Bank of America Merrill Lynch. It was moderated by Gina McFadden, the President of the OIC and Executive Vice President at the OCC. McFadden has over 25 years in the space and acts as a role model to women in the Options market.

The panelists’ conversation focused on the role of technology in the marketplace and how new regulations coming out of Washington are further impacting trading systems. What were once known as sexy items in a technical offering, such as front-end trading systems which include trading screens and execution systems, have been replaced with hot topics such as compliance and back-office capabilities. The panelists agreed that these services are inherent to a firm’s success.

The panel discussion concluded with a question about what would be the next best thing. Attendees were told to look for more opportunities and electronic capabilities around market data.

The event ended with a networking reception and a chance for attendees to heed Farnstrom’s advice. Women shook hands, explored synergies and found ways to connect with each other.

Fulfilling WILD’s Purpose

With so much change taking place in the derivatives space, it is important to foster an environment of support for women looking to take advantage of the emerging opportunities. WILD’s mission statement is to help women advance their careers through educational workshops and seminars. It’s also dedicated to developing and recognizing women as role models in the derivatives space. As an attendee in the audience last week, it was good to see the idea of WILD coming to fruition.