View from the Top: Bill Brodsky


Five Questions for Bill Brodsky, Chairman and CEO, Chicago Board Options Exchange (CBOE)

December 2010


Over the years, one of Bill Brodsky's strengths - in addition to running very successful exchanges - has been his ability to communicate effectively with industry leaders, regulators and local and national legislators, taking the lead in discussions on issues crucial to CBOE and the U.S. options industry.

This past July, he was one of just seven financial industry spokespersons - and the only exchange official - to testify before the House Financial Services Committee regarding the Obama Administration's Financial Regulatory Reform proposal. This July, he was invited to Washington to witness the historic signing by President Obama of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

With these kinds of credentials, we thought Bill Brodsky was the ideal candidate to launch our "View from the Top" feature, where we ask a senior member of the options industry to take a look back, and then forward, at the options industry.

What is the biggest change you've seen in the options industry since you started?

"It's difficult to think of just one thing because so much has changed. First, new technology has given customers greater access to the markets today - much more than even ten years ago. The cost is lower, markets are more liquid, and technology has made it easier. Plus, more people understand how options work. In the early days, people thought you were trying to sell snake oil."

"Second, new products. The introduction of index options, LEAPS®, and most recently CBOE's VIX® products, have changed the dynamics of the industry. For financial advisors, the launch of benchmarks like the buy/write and put/write indexes has also been significant."

"And third, the automation of the industry and pricing. Of course, no matter how fast a person can do the trade, there's still a learning curve with options, but we're working on that on a daily basis, both at CBOE's Options Institute and with The Options Industry Council."

What has been your greatest challenge?

"Convincing the CBOE membership to embrace electronic trading. People don't like change, and when CBOE introduced a Hybrid system, many traders on CBOE's trading floor viewed it as a direct threat to their livelihood."

What has been your proudest personal moment?

"The completion of our IPO in June was a very proud moment for me, for our members and for our staff. I knew we would prevail but it was a ten-year effort." (The CBOE went public this summer after a protracted legal battle with former Chicago Board of Trade members.)

"Also, the creation of VIX® futures and options. We figured out how to measure volatility and then how to trade it." (VIX is the ticker symbol for the CBOE's Volatility Index®, a measure of the implied volatility of S&P 500 index options. VIX futures were launched in 2004 and options trading on the VIX in 2006.)

What has been the impact of financial advisors growing use of options?

"For one thing, we now have financial advisors who trade a good number of options for their clients. Options can play an important role in a portfolio. Financial advisors are typically very independent and offer what is good for their clients regardless of fees."

With fixed income investments returning so little these days, using options is a natural next step. And financial advisors are doing more and more of them. We enable and support financial advisors since their participation is good for the whole industry."

Where do you see the industry in 2015?

"I think we will see greater institutional use of options, and I believe that CBOE's cauldron of innovation will bring more products - like the buy/write index and VIX - to the market."

"As a result of the Dodd-Frank bill, I also expect there will be more OTC trading coming onto the exchanges. With the versatility of options, I also would expect to see more financial advisors adding them to their clients' portfolios; it's clearly not a fad for them. The options industry is no longer in its infancy, but at the same time it's very young compared to other exchange-traded markets, so there is still huge opportunity here."


Name William J. Brodsky
Position Chairman & CEO, Chicago Board Options Exchange
Education A.B.and J.D. degrees, Syracuse University
First Job Attorney, Model, Roland and Company
Other Employment Chicago Mercantile Exchange, American Stock Exchange
Honors 2000 Derivatives Hall of Fame
2003 "Lifetime of Achievement Award," Anti-Defamation League
2009 Joseph Sullivan Options Industry Achievement Award
2009-2010 Chairman of the World Federation of Exchanges
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