Every year, somewhere between $35 billion and $50 billion in capital is raised via initial public offering of company stock in the United States. According to Renaissance Capital, that accounts for around one hundred and two hundred new ticker symbols a year — not exactly standing still, but not exactly a torrid pace. It is, however, a steady pace. With the exception of the go-go days of the tech bubble in the late 1990s, trading in equities has been considered the sleepy, unimaginative end of the financial services sector. Certainly, it wouldn’t appear there’s a lot of room for investment banking job growth there, whether it’s in IPO advisory services, securities trading or company research.
So why is it that equity options is so hot right now? Then again, who cares why? It’s growing prodigiously, so maybe that suggests a more target-rich environment for finding Wall Street jobs.
According to an industry group called the Options Industry Council, almost 361 million contracts on equities or exchange-traded funds changed hands in October 2013, almost a 24 percent increase over same period the previous year. Even so, the year-to-date growth doesn’t quite break 2 percent.
Therefore does it make sense that, as the Aite Group reports, there were only seven U.S.-based equity option exchanges in 2010 but there are now at least 12? Consider also that volumes dropped — as you’d expect — during the early days of the Great Recession, and then dropped again — this time taking open interest with it — over the course of 2012. Further consider the technical glitches that have always been part and parcel of derivatives trading. Finally, consider the regulatory scrutiny that is currently being directed at Wall Street. According to Aite senior analyst Howard Tai, the real question is whether or not 12 is enough.
While we puzzle that one out, let’s just roll with one takeaway: they are hiring.
You might want to make an inquiry at any of these young bourses:
- Miami International Holdings, parent of the upstart MIAX exchange
- BATS Global Markets of Lenexa, Kansas, parent of both the new BZX exchange and even newer BYX exchange
- Lower Manhattan’s own International Securities Exchange, or ISE.
As you might suspect, working at these exchanges involves a certain information technology savvy that goes beyond the typical analyst’s SAS and Microsoft Excel capabilities. Still, if you’re looking for an financial services career, maybe it’s time to embrace that the future is now and come to grips with the fact that programming skill is quickly becoming an integral part of the investment banker’s toolkit. That holds true even if you’re applying for positions at such venerable options exchanges as NYSE Euronext, Nasdaq OMX or the Chicago Board Options Exchange.