Equinix sits down with Curt Schumacher, CTO of the largest and oldest U.S. options exchange, the Chicago Board of Options Exchange (CBOE), to discuss their continued expansion into New York, London and beyond.
What is driving your expansion not only into new markets but into new products/services?
CBOE’s goal is to capture new trading volume by expanding our audience and speeding up trading latency (micro to Nano craze).
What kind of presence do you have in NY4 and soon to be in LD4? (pop vs. matching engine). What is being traded there and why?
CBOE Holdings houses all its computing infrastructure for each of its trading markets; CBOE – options, C2 Options Exchange (C2) – options; CBOE Futures Exchange (CFE) –futures; and two affiliates, CBOE Stock Exchange (CBSX) – equities, and One Chicago – single stock futures) at NY4. The networking, match engines, ticker plants, storage, etc., all are housed in two secure cages composed of 125 cabinets. At LD4 in slough, CBOE recently installed a communication point of presence for firms in London to connect back to CFE which resides in NY4.
Why London? What’s your view of foreign markets currently?
CBOE feels the popularity of its VIX Index product is attractive to London/European traders. Once CBOE moves to extended hours this summer, we hope to capture after-hours volume both from European traders and from U.S. traders who wish to take advantage of longer hours for trading VIX futures.
What are the key factors/business criteria for making an expansion decision? (e.g. Geography, network density, ecosystems of buy- and sell-side firms, economic factor, high-interconnectivity model, etc.)
Expanding into Equinix data centers is attractive to CBOE because of the concentration of firms and network bandwidth providers that have presence at their centers.
What’s next beyond London? Asia-Pac? How do you think about moves within one region or moves to new regions?
Asia-Pac has been discussed as next move, but CBOE will first need to spend time evaluating the London move.
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Want to read more about Equinix and CBOE? Check out this post.