OSTC Correlates Biometrics With Trading P&L

Chief executive Lee Hodgkinson said OSTC is in the vanguard of the fourth industrial revolution as the futures prop trading and education firm uses technology to monitor traders’ physiological outputs against their performance.

The firm has developed a biometric app to help traders measure performance and maximise efficiency.

Lee Hodkinson, Euronext

Lee Hodgkinson, OSTC

Hodgkinson told Markets Media: “ZISHI Elite brings the science and technology of elite sport into the trading room. We want employees to reach optimal levels in all aspects of their life including their minds and bodies.”

ZISHI is OSTC’s central knowledge suite and ZISHI Elite measures physiological signals to determine each trader’s optimal heart rate variability state as well assessing sleep, mood, anxiety and stress levels. The data is analysed against volume, P&L and the level of order activity to find their personalised optimal zone.

The firm developed the technology over two years with a trial group of 30 traders and more than 100 traders have now voluntarily signed up to the scheme.

“We work with sports psychologists at Bangor University to correlate biometrics with trading P&L so traders can manage their energy, mood and mental health to be more productive and have longer careers,” added Hodgkinson.

OSTC took the ethical decision to prevent management having access to an individual’s data, but they can see from aggregated data that performance has improved.

Hodgkinson said: “Even if P&L stays the same but traders have a better quality of life, then we have been successful.”

The next version of ZISHI Elite will provide bespoke content. For example, if a trader is not sleeping well they will be automatically sent videos and written content on how to improve sleep or eat more nutritiously.

Future versions will be also immersive. For example, if a trader needs to be in a state of calm to make the best decisions, virtual reality goggles may put them in a beach setting to calm their brain waves before trading.

“What we are doing is pretty unique and we are in the vanguard of the fourth industrial revolution,” added Hodgkinson. “ZISHI can be used in any data driven environment where decision making is critical.”

OSTC is already in discussions with other financial services firms and in adjacent broader industries about using the technology.

Exchanges

Prior to joining OSTC last year Hodgkinson had been at Euronext for more than nine years and his last role at the pan-European exchange operator was head of markets and global sales and chief executive of Euronext London. During his 30-year financial career he has also been chief executive of SmartPool and worked at SIX, NYSE Euronext, LIFFE and the London Stock Exchange.

This experience will prove useful as he joined the board of data provider BMLL Technologies as chairman last month, having been appointed a non-executive director.

Hodgkinson said: “BMLL normalises T+1 data from all the exchanges around the world across all products. This data is deployed in the cloud to democratise access for quant services and other cases such as transaction cost analysis.”

Johannes Sulzberger, BMLL Technologies

BMLL has recently launched a derived data service which allows users to consume granular message-by-message exchange data directly into their trading systems at speed and scale to optimise their strategies.

Johannes Sulzberger, chief executive of BMLL, said in a statement: “I am delighted to welcome Lee to the BMLL team. He will be instrumental in BMLL’s mission to democratise access to granular market data and advanced analytics at scale.”

Hodgkinson continued that the trading business of exchanges has been commoditised while the listing business has also changed.

“Their traditional revenue streams remain under pressure from technological changes and regulatory change,” he added. “Exchanges need to seek out new value creation through more sophisticated products, clearing, data and risk transfer so Refinitiv is a great deal for LSEG.”

David Schwimmer, LSE Group

In August London Stock Exchange Group said it has agreed definitive terms with a consortium, including Blackstone and Thomson Reuters, to acquire data business Refinitiv for $27bn (€24.5bn).

David Schwimmer, chief executive of LSEG, said on the exchange group’s third quarter results call that company has begun the process of obtaining regulatory approvals and is on schedule to complete the deal in the second half of next year.

Education

In addition to prop trading, OSTC provides education and trading through its ZISHI program, which was a reason for Hodgkinson joining the firm.

“I joined OSTC because of its vast potential,” he added. “The firm has a vision that anyone, anywhere, can learn to trade and that makes me want to get up in the morning.”

Hodgkinson explained that OSTC only hires traders for whom this is their first job and focuses on diversity in all of its forms, doing its utmost to prevent people recruiting someone like them.

“We have 500 people in 12 offices and 80% of our staff are under 40, with 50% under 30,” said Hodgkinson. “We could add another six offices over three years, but growing our education franchise is critical, and helps us diversify our top line.”

He continued that there are 1.8 billion people aged between 10 and 24 who need education and jobs outside the traditional financial centres of New York, London and Tokyo. As a result OSTC has partnered with exchanges in developing markets to offer accredited qualifications through ZISHI’s educational platform, Cornerstone.

Last month OSTC announced a collaboration with SGX, the Singapore exchange, for Asia’s first official employer-led accredited trading programme.

Immersive courses will be delivered over five weeks in Singapore from next year. The courses are fully accredited and OFQUAL regulated, while receiving recognition at associate level by the UK Charted Institute of Securities and Investments. Applicants successfully completing ZISHI programmes can begin careers in finance including trading, financial analysis, portfolio management, risk management.

In September OSTC also announced an education collaboration with China’s Dalian Commodity Exchange for its top ten high-ranking officials.

ZISHI Cornerstone gave the ten officials hands-on immersion into trading and market-making over two weeks with the aim of supporting the development, management and growth of the Chinese exchange.

Hodgkinson said in a statement: “This is further evidence that our expansion in mainland China is gaining traction and underscores our reputation as a first-class provider of knowledge and education in the global financial marketplace. The development of OSTC’s non-transaction revenue stream is progressing well and we are well-positioned for further growth.”

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