Our Origins: Disrupting the Status Quo

April 22, 2023

Cboe was created in 1973 to deliver an entirely new asset class to the industry -- shaking up the status quo to bring solutions to more people. In the last decade, the company has acquired businesses that are disruptors, sharing Cboe's vision for creating a trusted, more accessible marketplace. 

The company we are today looks quite different than the company we were in 1973. What started as a Chicago-centric options exchange is now the world's go-to derivatives and securities exchange network. We still know options better than anyone, but we also offer trading solutions and products in multiple asset classes, including equities, derivatives, FX, and digital assets. And while we’re still proud to call Chicago home, we’re present across North America, Europe and Asia Pacific. 

However, even as so much has changed, there are important constants that remain. Cboe is still driven by its purpose of building trusted markets. Everything we do is in an effort to provide better solutions and help people pursue a sustainable financial future. We’ve made the most of our 50 years but we’re not slowing down.  

Follow the links below to read more about the origins of the pioneering companies that make Cboe the thriving business it is today. 

LiveVol was created by a group of options traders who were seeking more robust analytics on the trading floor. It was a game-changing tool that gave options traders more robust, real-time market analytics. 

Additionally, being a web-based platform made it accessible from practically anywhere. LiveVol quickly gained attention in the trading floor community and soon became a must-have for options traders aiming to stay competitive in the market.  

Bats was founded with one simple goal in mind: making markets better.  

In the early 2000s, the founding members of Bats were working at Tradebot Systems, a trading firm, and saw a duopoly in U.S. equities markets that stifled competition in the markets. And so, 13 people, including Cboe’s COO Chris Isaacson, began looking for a way to shake up the exchange industry and inject more competition into the U.S. equities market. 

MATCHNow was founded in 2008 as an Alternative Trading System (ATS), an anonymous trading platform intended to inject more competition into the Canadian equities markets. 

“We were really the first challenger to the only incumbent exchange in this space,” says Bryan Blake, Vice President, Canadian Equities. “MATCHNow was a disruptor, innovating the way things had always been done to provide a unique value proposition to the Canadian market.” 

When open-outcry trading was the only way to participate in the market, it was relatively easy for someone on a desk to call a floor broker and get color commentary on who was trading what options in the open outcry pits. In the early 200s, as market structure began changing tremendously, that became a lot more challenging. 

Henry Schwartz was working as a market maker at a big bank in the early days of the options exchange electrification and trading automation, frenzy when he realized that there was an urgent need to create a comprehensive options trading flow tracker—and no one was doing it. The traders he spoke to were often asking, “What’s actually going on?”  

Jerry Hanweck started his career as a Microsoft programmer – when the stock was still trading below $20 – but he knew a career in programming wasn’t the right path for him. Jerry transitioned into the futures industry, then moved into the equity options space. He even went back to school to earn a PhD in managerial economics. 

After a stint in property development in Vegas, Jerry reconnected with his former colleague, Mike Hollingsworth, to create a consulting firm. However, Jerry and Mike quickly realized there was a great opportunity to leverage new technology to provide real-time, high performance risk management analytics.

Michael Izhaky spent the first half of his career trading options and other derivatives for banks. But as he left that trading environment and entered Chicago’s proprietary trading community, he realized there was a severe lack of high quality, off-the-shelf tools for options risk management and idea generation.  

So, he got to building such a system one. 

Euro CCP formed in 2013 as a pan-European central counterparty, becoming the most connected CCP in Europe clearing cash equities, depository receipts, exchange traded funds (ETFs) and equity derivatives contracts.  

“Our ethos was to be a one stop shop and provide a competitive advantage to our customers,” says Tim Beckwith, Head of Commercial Development, Cboe Clear Europe and a founder or Euro CCP. “We had created a more stable clearing environment and it was a tremendous success.” 

Chi-X Asia Pacific was founded to bring more competition to the financial markets in the Asia Pacific region. With operations in Japan and Australia, the company quickly established a reputation as innovative market operators, bringing much needed solutions to the area. 

Importantly, Chi-X Japan was the only broker-neutral proprietary trading system in Japan. Chi-X Australia offered the exclusive trading of CXA quoted warrants and ETFs.  

ErisX was founded to bring the hallmarks of traditional trading to digital assets.

For many years, the Canadian exchange space was not very competitive, putting investors in the region at a disadvantage – especially in the Listings business. 

“We didn’t feel that there was anyone in the industry in Canada that truly cared about and prioritized investors and capital raisers,” says Jos Schmitt, Senior Vice President, Head of Global Listings. “So, we set out to create a platform that solved that problem.”