Joanna Mallers is the COO of Nico Trading and secretary/co-founder of the FIA Principal Traders Group (PTG). Born into the industry, Mallers admits that this the most significant time of change for futures that she has seen in her career. She sat down with web content editor Nicole V. Rohr and shared her thoughts on how Dodd-Frank clearing requirements, electronic trading and new hires have impacted Nico Trading, and also how FIA PTG initiates impactful discussions about these topics among industry members.
Q: How did you get into the industry?
A: I was born into the industry. My father was the chairman of the Board of Trade William Mallers Sr. in the late 1960s. I worked down here all through college. Then I was a nurse for six years. And then I came back. I worked in my family’s business First American Discount along with John Lothian in the 1980s. I’ve never traded. I’ve always worked in the trading business, but mainly in back office, operations and compliance. So, I’ve been around this my whole life.
A lot of what I did before I worked for actual trading firms, when I worked on the clearing side, was customer support and relationship management. In a certain sense, it’s kind of taking care of your clients. I think I was pretty good at it. When you’re in nursing, you learn about triage—doing lots of things at one time and figuring out how to keep track of them all. I think some people struggle with it, but I feel like I was trained in things that are actually more important, like life and death. I’m able, for some reason, to juggle a lot of things going on at the same time, keep track of them and prioritize them without spending a lot of time thinking about prioritizing them. It just sort of happens automatically.
Q: What are your responsibilities at Nico Trading?
A: I am in charge of the back office, accounting, human resources, recruiting, compliance and facilities. So, pretty much everything that is not IT, trading or risk management. I’m also in charge of exchange relationships and industry relationships, which is why we are so involved with the FIA PTG. I manage that relationship.
Q: What is your role with FIA PTG?
A: I’m one of the founders. About two years ago, Chris Hehmeyer (CEO of HTG Capital Partners, LLC), Don Wilson (CEO of DRW Trading) and I were talking about the fact that there was so much going on in the industry, and that even though all these trading firms are competitors, we’re aligned on a lot of the topics. There didn’t seem to be an easy way for us to work together. We decided that the best way to do it would be to join some type of established organization. We launched it in January 2010, and now it’s been almost two years and we have 36 member firms, which represent a good percentage of the trading firms in Chicago. What’s interesting about it is that although we all compete for staff, trades and a lot of other things, on some other narrower topics we’re completely aligned.
I’m the secretary. So, rather than everyone reaching out to everyone all over the place, people send me issues or topics or things they want distributed. I manage the [e-mail] list along with FIA in Washington. Everything kind of goes through me and I decide if it’s interesting or not interesting to them. We’ve broken down into probably six working groups, and I coordinate to be sure that they’re meeting. I try to listen in on all calls.
FIA PTG comes together and meets in a room about every eight weeks. We have lots of other smaller meetings, but we have lots of other smaller meetings, but they’re all over the phone. I try to listen in on all of them, just so I can be sure that things are moving forward, so I know what the action items are, and so I can chase after people. Then I put out the minutes and I do all of the typical secretary stuff, but that’s just a small part. A lot of it is just being a conduit for pushing information out, gathering information and figuring out who needs to see it.
Q: FIA PTG addresses challenges within the industry. What do you think your primary challenges at Nico are?
A: I think that all trading firms have challenges around talent. I think that figuring out how to get talent and how to bring it in and incorporate it into your business and train it and mentor it has been a growing experience for us. We moved into this office about a year and a half ago, and before that we were very size-constrained. We didn’t have physical space. When we moved, we had about 70 people and now we have about 105. We hired most of them within a year. That’s a big change for a firm.
We were originally a floor-based trading firm, and now we’re figuring out what technology to use and what to build. It’d be easier if we were all floor or all electronic but I’m sure everybody says that. That’s always a challenge as to where to allocate resources. We’re also spending a fair amount of time trying to figure out what Dodd-Frank means and what it’s going to look like, and being sure we’re positioned for that.
I think a lot of us are thinking more about a lot more electronic trading, and then also about this whole swaps world. The opportunity to now be involved in interest rate swaps when they become cleared is very interesting to us because our firm originated in the treasury market on the floor. Our owner is an extremely experienced interest rate trader, and to have access to that market is very interesting.
Q: Has there ever been another time when you’ve felt this much change in the markets?
A: No, I don’t think so. For a while, everybody was saying the floors were going away. I used to joke that I wished I had bet every person who said to me, ‘What are you going to do when there are no more floors?’ At that point, I think we all thought that a lot was going to change, but it didn’t. It moved in small steps.
I’ve never seen [a time] when we’ve had so many different issues that have been important to us, that we need to understand and prepare for. Early in my career, I wasn’t quite as involved in thinking about policy and regulation. Now, I feel like almost everything you read, you think, ‘Well, how is this going to impact us?’
I was raised just believing in the futures business and I sometimes think, ‘What would my father say?’ What would he say and what would be the best thing for the industry as a whole? Because it’s a great industry and it’s a Chicago industry. Hopefully, it will just be a slow evolution, everybody will still have a place and everyone will slightly alter the way they operate. I guess there’s a risk that it could change in a big way.
Nico Trading is an owner of Eris Exchange, a Chicago-based futures trading platform for the interest-rate swap market.