Russell Rhoads recently joined TABB Group in July 2018 as the Head of the Derivatives Practice. Most recently he was the Director of Education at Cboe Global Markets’ Cboe Options Institute where he taught options trading, helped launch bitcoin contracts and was instrumental in rolling out Cboe’s social media efforts. Rhoads has also authored several books on the financial markets such as Trading VIX Derivatives and Trading Weekly Options.
Hehmeyer Trading + Investments sat down with Russell Rhoads to talk about his new role at TABB Group, what it was like working with Cameron and Tyler Winklevoss at Cboe and how it is crucial to embrace innovation and change.
1. You recently made the move to TABB Group from Cboe Global Markets. What are your new responsibilities?
I’m now Head of the Derivatives Practice for TABB. There are four areas covered by TABB: Derivatives, Equities, Fin Tech, and Fixed Income. I am responsible for contributing commentary to the TABB Forum www.tabbforum.com as well as conducting in depth research for TABB Group with some projects being independent ideas and others being directed by clients. My first duties have been to take over publication of the TABB Option Liquidity Matrix and Quarterly Option Market Review.
2. Now that we are caught up to speed, let’s work backwards. What was your first job in the industry?
After graduating from the University of Memphis with a Bachelors in Business Administration in 1992 and a Masters in Finance in 1994, I went on to earn a Masters Certificate in Financial Engineering from the Illinois Institute of Technology in 2003.
While I started my career as a runner in the meat pit section of the CME, back when there was one floor at 30 South Wacker, I wasn’t done with school. I recently decided to pursue a PhD from Oklahoma State University and expect to graduate early next year.
3. How has the industry changed since you started?
Globex was introduced when I was a runner, which was the beginning of volume moving from open outcry to electronic trading. Many people thought the floors would be gone in three years. This was in 1992. The floors aren’t what they use to be, but it’s nice to see they still exist.
4. What are some exciting developments you see in this space?
The democratization of the markets is a great development. Marty Kearney, who was a mentor of mine at Cboe, liked to say that it was cheaper for him to execute trades as a retail trader than it was when he was a market maker in the early days at Cboe.
5. What are some of the challenges you see in the derivatives space?
I think a persistent challenge for the derivatives industry is properly educating the various market participants. The exchanges do a great job providing information, but that doesn’t mean everyone spends the time researching what they should before entering a new market. This also poses a great opportunity for firms like TABB Group as well as blog writers like yourself to provide accurate and compelling educational content.
6. You've been in a research role for a lot of your career. What do you like about analyzing data and providing research?
The financial markets are very competitive and you have lots of very smart people looking for an edge. I enjoy the challenge of coming up with unique insights about the various markets that others have not necessarily considered.
7. Hehmeyer Trading + Investments recently launched the Hehmeyer Cryptocurrency Index Fund. What are your thoughts on blockchain and cryptocurrencies?
I have some small holdings of a couple of cryptocurrencies. I think there are going to be some long-term winners in this space and many more losers. A diversification product is a great idea. Bitcoin has been a great first step in the space, but I equate it to My Space, which was a forerunner to Facebook. We are all looking for the Facebook.
8. Did you learn anything from working with bitcoin futures at Cboe?
Yes! I got to travel with Cameron and Tyler Winklevoss who started Gemini, which was the first regulated entity that allows you to buy and hold bitcoin. Getting to listen to them describe why they are excited about the crypto space sold me on the long term benefits.
9. If you could go to coffee with anyone in the derivatives space, dead or alive, who would it be and what would you ask them?
He’s not in the derivatives space, but I’d love to have a conversation with Alan Greenspan. He’s been around for so long and seen so much change in the financial industry. He was part of Ayn Rand’s inner circle, and worked for several presidents (Nixon, Ford, Reagan, George Bush, Clinton, and George W. Bush). The history he has witnessed is unparalleled in the financial world.
10. What is the best piece of advice you ever received?
To be in this industry for the long term and not be too concerned with the short-term noise. Also, this is a very innovative industry and those that don’t keep up with the changes tend to end up in other lines of work.