There are certain years that stand out in the collective memory of the financial services industry: 1929, 2000, 2008. Although we’re just over two-thirds of the way through the year, 2020 is poised to join this group. The coronavirus pandemic led to unprecedented spikes in volumes and volatility in markets around the world, while also forcing most capital markets employees to work from home, creating a two-pronged crisis for investors and the firms who service them.
In times of turmoil, these companies take on even greater importance, and the past few months have been no exception. With markets moving at a dizzying pace, the margin for error is that much smaller. Fortunately, firms across the industry have risen to the occasion, proving their worth amid difficult conditions and ultimately helping their clients weather the worst of the storm.
Today, we’ll profile five financial companies and the issues they faced during this period and how they coped as an organization both internally and externally. Firms profiled include an agency broker, a market maker, a block trading venue, a risk management provider and a market data solutions provider.
DASH Financial Technologies
Along with the skyrocketing volumes and volatility, the closure of physical trading floors due to social distancing guidelines was a disruptive result of the pandemic. Enter DASH Financial Technologies, an agency-only brokerage and technology provider that played a vital role in keeping the markets humming, particularly between mid-March and May 4, when all physical options trading floors in the US were closed.
DASH is the leading provider of option trading technology, so when the markets became 100% electronic, the firm rose to the occasion, serving as the go-to provider for much of the options space. In particular, with orders unable to be crossed on the floor, their electronic crossing algorithms played a huge role in helping their interdealer broker (IDB) clients access liquidity and carry out their strategies with precision amid uncertain conditions.
“Crossing is critical functionality for IDBs and when the floors shut down many needed a way to cross electronically on just a couple days’ notice. Our sales team was able to quickly shift their focus and make sure our clients had the tools and education they needed to still be able to effectively service their clients,” said Stino Milito, Co-Chief Operating Officer at DASH. “Our executed market share increased to nearly 20% while the floors were shut down.”
Perhaps one reason why DASH has been able to thrive was their quick action in response to the pandemic. By securing extra equipment and ensuring that their staff had sufficient work-from-home setups in the early going, the firm had an easier adjustment to the new normal.
“One of our biggest concerns was the feasibility of remote operations for our trade desk, normally accustomed to working in close proximity to one another. The team transitioned seamlessly from working together in an office, where communication and visibility is unencumbered, to the majority working remotely. The team’s performance has exceeded expectations,” said Milito. “Like many other companies, we rely heavily on video conferencing solutions such as Zoom and BlueJeans and they have proven to be reliable and efficient for our team.”
