My Ferrari is faster than your Ferrari (Audio)
David Harris, the president and chief executive of CBOE’s relatively new stock exchange, says that in the race to New York, Chicago-based options traders will never beat out New York-based options traders looking to hedge the liquidity they just provided.
Harris, who bikes to work every day, uses an automotive analogy to make his point: “If my Ferrari and your Ferrari are here, but I have to run an extra hundred yards to jump in my car (before) I race to a point, and you’re literally standing right next to your car, I’m never going to win.”
The traders in Chicago need an equity market where they know they can compete with traders on the U.S. East coast — and Harris said the CBSX is that market.
He told the Reuters Exchanges and Trading Summit that technology will never completely overcome geography when it comes to the milliseconds of modern trade:
“The speed of light is the speed of light.”