Benzinga, a media and data provider bridging the gap between retail and institutional investors, will be bringing back its annual Global Fintech Awards event to New York City on Dec. 8, 2022.
Ahead of this recognition of disruptive innovators in finance and technology, Benzinga will periodically publish articles on those brands that it thinks are making a measurable impact.
Today’s conversation is with Brian Hyndman, the president, and CEO of Blue Ocean Technologies, the firm allowing people to manage risk in equity markets 24-hours a day.
The following text was edited for clarity and concision.
Q: Hey Brian, nice to speak with you. Tell me a little bit about yourself.
Brian Hyndman: I got into electronic trading in 1998 when we started Brut ECN, and we were competing against incumbent exchanges.
Nasdaq Inc (NASDAQ:NDAQ) ended up acquiring us in 2004 and, at Nasdaq, I was responsible for running the exchange platform, as well as product and sales efforts.
We ended up acquiring the Island ECN, along with the Boston and Philadelphia Stock Exchange, which put Nasdaq on the map. Prior, they were a quasi-government agency, falling behind in technology and losing market share to startups.
When Nasdaq got back into the driver’s seat, I moved over and ran their global data business. I more than doubled the revenue to $550 million six years later and, eventually, found my way to Paxos, a leading crypto firm.
When did Blue Ocean come into the picture?
After three years as a senior adviser at Paxos, I came across the Blue Ocean guys needing to raise capital. I was intrigued by the idea of U.S. equities trading 24-hours a day.
I joined and we raised $10 million from Urbana. Over the course of the past year, we proved out the model that global investors want the ability to manage their risk at all hours of the day.
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Tell me a little bit about the infrastructure and how I, as a retail participant, can access markets at any hour of the day.
First, we’re a registered alternative trading (ATS) system approved by the Securities and Exchange Commission (SEC).
Anybody who is a FINRA registered broker-dealer can access the platform.
It’s just like the Nasdaq system. Nasdaq can’t go directly to retail. They have to go to the broker-dealer like Charles Schwab Corporation-owned (NYSE:SCHW) TD Ameritrade, through which retail then comes.
If a retail investor is on your platform, and they have the desire to connect, they come through that FINRA registered broker-dealer that is subscribed to our Blue Ocean ATS.
What’s the motivation behind 24-hour trading?
Back in the day, when I was at Nasdaq, I wanted to start 24-hour trading, but people at the large investment banks wanted to go home at 5:00 p.m.
The world has changed and now everybody has the infrastructure in place due to crypto and their offices overseas in Hong Kong and Singapore.
We have a transparent asset class, trading maybe 12.5 billion shares during a six-and-a-half-hour period. We think giving investors in, for example, Asia, that ability to trade during their daytime hours, would add to that liquidity, substantially.
Got it on the technology side. You still need humans operating this technology, right?
Yes, you need teams in place – eyes on glass – looking at connections, logs, and answering questions a particular customer may have.
What are some of the biggest advantages of this extended trade?
Risk management. If there’s a geopolitical event on a Sunday night, people don’t want to wait till Monday Morning to reposition themselves.
I’m sure there are opportunities to monetize in other ways, too. Can you discuss this?
The data business is lucrative.
If we’re the only player operating from 8:00 p.m. to 4:00 a.m., which is going to be the longest timeframe for any trading session, you could imagine that the data we’re going to produce it is very valuable and if we can get it to more sites, it’s going to make our business more credible.
