00:00Today I have the pleasure of interviewing Fred Tomczyk, who is the CEO of SIBO.
00:11Fred, thank you so much for your time.
00:12It's great to be here.
00:13Let's kind of dive right into it.
00:14It's been over a year since you took on the role of CEO.
00:18What's kind of surprised you the most of this journey?
00:21You know, not a lot has surprised me.
00:22I was on the board at SIBO for the last four years prior to stepping into the CEO role.
00:27So with respect to the company, I had a pretty good perspective on it.
00:30If there's one thing out meeting clients and whatnot that sort of surprised me or opened
00:36my eyes is, number one, the demand for technology and access to data.
00:42Number two would be the growth of the retail investor.
00:44And in particular with Robinhood, I've always known about Robinhood, but I never realized
00:48they were growing so fast.
00:49And that was a bit of an eye opener for me.
00:52And then third, no matter where I go in the world, people want us, you know, because we
00:56run a global securities exchange, you know, they want us to help, you know, bring competition
01:02to that market, introduce options, but they also want access back to the U.S. market.
01:06Yeah.
01:07Well, what's interesting is SIBO has been an innovator in this space, right?
01:09No question about it.
01:10And you've also had rapid growth that you mentioned as well.
01:13Tell us about the announcements that we just heard at this Hood Summit with the partnership
01:16with Robinhood.
01:17You know, there's, I think it was great last night.
01:19You can see what they're trying to do, or Vlad's trying to do.
01:24He's trying to take the place of, you know, the old Ameritrades and E-Trades, the thinkorswims
01:28that were the true innovators and disruptors of what we used to call the full commission
01:32brokerage space.
01:34So I can see that, you know, now with them all consumed into much bigger enterprises,
01:38he's trying to take that place as the innovator and the disruptor.
01:42The big thing was their trading platform, Robinhood Legend, which, you know, when I
01:47look at it, it looks familiar, but, you know, it's a good trading platform and the introduction
01:53of index options and futures and products like that.
01:57So they're really moving into the active trader space in a way I haven't seen that historically.
02:01Yeah.
02:02The platform looks great.
02:03I mean, I was just checking it out.
02:04It made me want to place a few trades.
02:05So it's definitely exciting stuff.
02:06Now, when things are going great, everyone's happy.
02:08You actually have the experience of going through with TD Ameritrade with the 2008 financial
02:12crisis.
02:13Now we face in this world of 2024 with geopolitical risk, election year, things like that.
02:18How are you kind of making sure that SIBO is set up to go through these tumultuous times?
02:21Yeah.
02:22Whenever you run a market-based business, particularly one that has a high percentage
02:27of the revenues in trading, you know you're going to go through ups and downs.
02:31And so the important thing in running these kinds of organizations is two things.
02:35Number one, make sure that you have the products and services available to trade through any
02:40environment.
02:41That's one of the advantage of option trading is you can trade regardless of environment.
02:46The second thing is to keep focused on the long-term and the secular trends that you
02:51see in the market.
02:52And if you stay focused there, yes, you will have your ups and downs, but you'll continue
02:56to grow into what we see as a long-term secular growth trends, which for us, that's option
03:01trading, the growth of the retail investor, those types of things.
03:05You know, a lot of times, I know for me, my family, whenever they think of me in the stock
03:08market, they're like, oh, it's too risky.
03:10And I feel like that's how people see options, like, oh, it's risky, it's volatile.
03:14But it seems like you, along with SIBO, are very big on, like, the education front.
03:17Why is that so important?
03:18Well, first off, I think, try to remind everybody that options, the roots of options, and most
03:24derivatives for that matter, are in risk management, not in sort of big speculative bets.
03:29So it's primarily, in many respects, a risk mitigation tool.
03:34Secondly, when you look at them and you read about them and you hear about them, you obviously
03:39get nervous.
03:40I think it's important you go through the education process.
03:42You understand them, the different styles, whether it's an index option or a single
03:48stock option, the difference between a European style option versus American style, cash settle,
03:54physical settle.
03:55All those types of things are important for you to understand.
03:57So take the education.
03:59And if the broker that you're trading on has what's called paper money, try that first.
04:04So you can see, try your trading strategies before you put money at risk and get yourself
04:08comfortable.
04:09You know, there is also on the education front, like, tax advantage, there's so many different
04:12things that people can learn about.
04:13All right.
04:14One year down, a lot of growth, obviously great partnership so far.
04:18Give me a sneak peek on what folks can expect in the next 12 months and further down.
04:23The next 12 months, I mean, obviously, you're going to see the last quarter here.
04:26Historically, we've had volatility in the markets around election.
04:30I think this one's no different.
04:32In fact, this one, unlike many that you see are kind of predictable, this one's unpredictable.
04:38I do think we have an event where there's a high degree of uncertainty.
04:41I think that's one of the reasons you're seeing the VIX back up at 20, at a 20 level, which
04:46is this long term average, by the way.
04:49But you're seeing that because I think people are January between the geopolitical environment
04:53and an uncertain election, a lot of people will sort of want to mitigate risk.
04:58So you see that in the fourth quarter.
04:59As you look out into the future, you're going to see CBO continue to focus on leveraging
05:04its global platform, investing in the technology, investing in the retail side, the data and
05:10access solutions, and continue to innovate on the derivative side, which is the core
05:14of CBO and what it's known for.
05:16And of course, you know, with the volatility, you guys had a product release around VIX
05:20as well.
05:21We did some webinars as well.
05:22So I think education front, there are a lot of different ways to take advantage of CBO
05:25products, VIX being one of them, because the volatility in the markets, how you trade with
05:29it is key.
05:30One final question before I let you go.
05:31What is your favorite CBO product?
05:33I know it's like asking your favorite child, but a little less, you know, dangerous of
05:37an answer.
05:38What's your favorite CBO product?
05:39I'm not going to pick a product, but I would say index options in particular, because I
05:44mean, I think for myself and for most retail traders, the index option with the advantage
05:49of a European style, which means it can't get called away on you, you made your bet
05:54and expires and expires into cash.
05:57So that's a great product.
05:58And there's favorable tax treatment for most people for an index option.
06:04So I think those three things make me sort of say our index, our proprietary index platform,
06:09the SPX complex in particular, the RUT complex.
06:13Those are great products for a retail investor.
06:16So they would be at the top of my list.
06:17And I'll reiterate, the tax advantage is definitely huge.
06:20Investors should definitely do their own due diligence on that.
06:21Thank you so much for your time here, Fred.
06:24You got it.
06:25That is Fred Tomczyk, who is the CEO of CBO.
Comments