Cboe acquired Trade Alert, a real-time alerts and order flow analysis service provider, at the beginning of June. We talked with Trade Alert’s founder, Henry Schwartz, about founding Trade Alert, the need for real-time information and why he’s excited to join Cboe.
Henry Schwartz’s career has come full circle. The founder of Trade Alert and now Cboe’s Senior Director, Head of Product Intelligence, found his love for the options industry on Cboe’s trading floor as a runner in the OEX pit.
“At the time, there were hundreds of people in every pit — it was absolute chaos, but I liked it. I liked the technology and the mental challenges,” Henry says. “I was hooked.”
After college, Henry stayed in trading for about five years before going to work at a bank on the institutional flow side, where he found a need for better market insight.
“It started as a solution to a problem I was really mad about. The bank’s sales team would want to know what happened after a big trade and we couldn’t give them an answer,” he says. “You could see that 6,000 calls had traded but you had no ability to know if it was a buyer or seller or even if it was actually a significant trade.”
Henry teamed up with Bill Sterling, now Director, Software Engineering at Cboe, to develop an options alert system that added transparency to options trading through technology. And thus, Trade Alert was born, providing users with options order flow alerts and analysis to help make sense of market activity in real-time.
With only a basic prototype in hand, Henry and Bill called on a few former bank colleagues to see if their venture was worthwhile.
“We demonstrated a few basic alerts and explained what we planned to charge for the service, then asked for their feedback, which was, ‘we’ll take it,’” Henry says. “It wasn’t even done, and we weren’t there to sell it to them, but they knew that having any sort of edge over the competition was important.”
Henry and Bill finished the product and quickly added clients from across the industry, from banks to broker-dealers and trade desks. From there, they continued to improve their product and grow their niche, adding new functionalities to appeal to broader audiences. A few years ago, they began adding FT Options’ analytics to some of their offerings, and now, the two companies are one team under the Cboe Information Solutions umbrella.
“Having Hanweck and FT Options in our house gives us a whole different way to attack these problems and expand the solutions we can provide,” Henry says. “Those kinds of synergies will really enhance what we can deliver to our clients.”
And that enhanced offering is more important now than ever. While most people are still working from home, not having face-to-face interactions amplifies the need for instant alerts that help investors stay on top of what’s happening.
“We were helping people get a handle on activity before, but it’s become even more important over the last couple months,” Henry says. “All of the sudden, no one could look across the pit or talk to the person next to them and we were able to be there to say, ‘here’s a tool that does exactly what you need.’ Providing that solution feels good.”
Henry and his team’s solutions-focused mindset is a great fit for Cboe.
“I’m excited to be a part of a team that has such a clear vision for developing great trading technology. The Information Solutions group is providing solutions to people who have a job to do. That’s all I could ask for.”