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The world of electronic options trade, according to Peterffy

Published in Automated Trader Magazine Issue 30 Q3 2013

A pioneer of electronic options trading, Thomas Peterffy has been described as a Wall Street legend. Peterffy answered a few questions from Automated Trader by email for our article on trends in electronic options trading.

Born in Budapest in 1944, Thomas Peterffy came to the United States in 1965 unable to speak English. By the 1970s, after designing commodities trading software, he bought his own seat on the American Stock Exchange and began trading options. He founded Interactive Brokers and today is worth an estimated $5 billion according to Forbes.

AT: Where did you get the idea for e-options trading from?

Thomas: Open outcry trading never worked for options because of the time priority among market makers for the many series that the specialists or exchange officials could not keep track of. This resulted in constant squabbles which, due to my small stature and poor English, I could never prevail in. I needed a computerised world to win.

AT: Do you think current regulation addresses market making obligations sufficiently?

Thomas: NO, formal market maker obligations were gradually weakened over the years.

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