Being able to deftly price risk has differentiated Chicago-based market maker Old Mission, according to Bryan Christian, Managing Director, Head of Business Development and Strategy, describing his firm which has traditionally specialised in trading the hardest to price and most illiquid ETFs.
News came at Inside ETFs, that the firm is to open up a direct-to-buyside offering to the institutional community.
Bryan Christian, Managing Director, Head of Business Development and Strategy explains that the firm is over a decade old, and has a quantitative ETF trading offering in that it uses quant-based models to understand the markets across assets on a global scale.
“If you think about the structure of a lot of ETFs, the plain vanilla were the early stages and now there are more complex structures, driven by futures and options or even fixed income,” Christian says. “You need to be able to support that and we are part of a growing space in the ETF industry where our value has been supporting the issuer community with a lot of these products.”
Good examples of the more illiquid ETFs that Old Mission supports are fixed income ETFs, emerging market ETFs or international ETFs generally.
“Our value is about servicing the issuers and the market for these more complex products. We can add value in that we can price more difficult things.”
The new initiative is a natural extension of the relationships Old Mission has built up with issuers and institutions, Christian says. “As an on-screen market maker, issuers and investors saw the value of us pricing risk so it’s about the growth of these bi-lateral relationships – we are looking to continue to expand our business here while adding the institutional coverage.”
Christian feels that the growth of Old Mission over the past decade has matched the growth of ETFs.
“That growth in the ETF space is really evident in the growth we have seen and we are really excited about some of these large global firms that want to test with us, who understand the value of competition and the value we have from a pricing standpoint,” Christian says. “We are well aligned across the marketplace so it’s really exciting.”
