FIA Expo 2023: Options Trading Skyrocketing in Popularity, Barchart CEO Explains Why
The FIA Futures and Options Expo is one of the largest and most diverse events for the derivatives industry. The Expo is held annually in Chicago and typically gathers professionals from various sectors, including trading firms, exchanges, clearinghouses, technology providers, and regulators.
In an exclusive interview with FinanceFeeds Editor-in-Chief Nikolai Isayev, Barchart CEO Mark Haraburda delved into the recent advancements in the company’s product suite.
Data Analytics has become a holy grail in today’s trading industry. And Barchart seems to be on trend. Kicking off our conversation, we asked the CEO about the recent launch of their business intelligence connectivity with leading platforms such as Tableau and Power BI.
Haraburda confirmed that they have plans to partner with more platforms to further bridge the gap between raw data and informed decision-making. He then highlighted the importance of integrating their data directly into these major platforms, such as Excel, Power BI, and Tableau, to simplify the process for their clients. Haraburda added that as clients transition to more sophisticated tools for decision-making, Barchart meets their needs by integrating with the most sought-after platforms. He stated that client demand would guide their future integrations to stay ahead in this rapidly growing industry.
Data-driven decision-making is a crucial aspect of thriving in the competitive landscape of today, Mark further noted, adding that their Business Intelligence (BI) connectivity is designed to empower enterprise data clients, enabling them to cut through the vast amount of data to concentrate on business growth. He stressed that Barchart is committed to enhancing its Enterprise data plans by introducing new features, which will enable clients to optimize their market research and analysis, increasing operational efficiency in the process.
Mark, again, confirmed that the decision to integrate with Tableau and Power BI was indeed driven by client demand. He further explained that the COVID-19 pandemic had significant impacts on the commodity space, leading to increased attention to commodity prices, especially from a purchasing perspective. The volatility and price fluctuations in commodity markets created a need for analyzing trends and having access to this information on dashboards, which became crucial not only for trading users but also for those involved in purchasing commodities and monitoring price trends.
In August, Barchart upgraded its Offer Management System, now seamlessly integrated into the cmdtyView platform. Mark Haraburda, in response to Nikolai Isayev’s question about how this helps users better manage their offer book and hedges, specified that this upgrade pertained to the grain aspect of their agribusinesses.
The Offer Management System is designed for commodity bid and offer management, specifically for purchasers of grain like corn, soybeans, and wheat, mainly agribusinesses and grain elevators in the US, Canada, and other markets. The platform allows users to accept offers from producers and then hedge those sales on the futures exchange dynamically.
This means that when a spot or cash transaction comes in, it can be hedged instantly with minimal risk of slippage. The system can also automate this process based on predefined criteria, making it more efficient. Additionally, Barchart has integrated these contracts into accounting systems, further streamlining operations for users.
Staying on the same topic, Mark mentioned that Barchart has taken further steps to enhance the digitization of processes in the agriculture commodity space. For example, they send out contracts digitally to producers when a physical transaction occurs, allowing producers to sign the contract on their phones. This digital approach streamlines and accelerates the process of managing contracts and transactions in the agricultural sector, closing a significant digital loop in their operations.
Barchart has become a commodity data and technology leader, trusted by over 600 agri businesses that represent over 2000 grain facilities right across the country.
Further elaborating on this, Mark Haraburda told us that Barchart launched an Enterprise Alerting Service for agribusinesses to address the communication needs between agribusinesses and their producer clients. This service is compliant with 10 DLC (10 Digit Long Code) regulations, which ensure the legitimacy and reliability of text message communications between businesses and individuals. He further explains that the 10 DLC regulations require that campaigns or information sent via SMS are registered, ensuring that recipients have opted in to receive the messages. These regulations also provide controls for opting out and improve the deliverability of messages, making sure they reach recipients’ phones quickly and reliably.
On the macro side, Mark discussed the impact of price pressures and volatility on the agriculture sector. He highlighted the importance of agribusinesses and farmers being able to take rapid and actionable steps in response to market dynamics. Compliance with 10 DLC regulations in Barchart’s Enterprise Alerting Service ensures that alerts and communications are instantly reliable, enabling timely decision-making in response to market changes.
Jumping back into market data, we asked Barchart CEO about the expansion of their market data inventory with historical futures options. Additionally, from a broader perspective, Nikolai Isayev inquired about the recent surge in the popularity of options as an investment vehicle.
Mark explained that the popularity of options trading has been driven by several factors. He clarified how options on futures data, which Barchart has expanded into its Market Replay service, is a valuable and somewhat rare dataset.
While options on futures have seen growth, the main surge in popularity has been in equity options. This growth can be attributed to several factors, including increased education and awareness about options markets over the past two decades, the market volatility experienced during events like the COVID-19 pandemic, the accessibility of options trading through user-friendly apps, and the introduction of new products like short-dated options. These factors, combined with market volatility, have attracted new participants to options trading.
In the final part of our interview, Mark Haraburda delved into Barchart’s Media Syndication Offering, called Barchart Impact, which was announced on the same day as the interview. He explained that Barchart.com has been a hub for data, charting, analytics, and news for many years, with nearly 3 million monthly users. Barchart has been expanding its content production and has partnered with news outlets to syndicate content.
Mark highlighted that Barchart Impact allows clients to leverage its network to reach a wide audience, including sponsored content, premium placement, or contributing news and market analysis. This offering is available to brokerage firms, exchanges, ETF issuers, investor relations firms, and PR specialists, providing them with the opportunity to distribute their information through the Barchart.com website and partner networks.