That's The Ticker

Online options trading has gotten much simpler thanks to an innovative design system

by Suzanne McGee

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Ask Wall Street honchos what they want from a trading system and they won’t even pause to reflect. Speed and accuracy are the twin goals; other features, they’ll insist, are just icing on the cake.

Now Peak6, a Chicago-based options-trading firm, is laying the icing on thick in the form of a new professionally designed online trading platform, which it hopes will attract investors in a crowded field. “True, it was a risk for us to make this investment, but we had to differentiate ourselves from competitors,” says John Hass, co-CEO of the fledgling OptionsHouse system, which caters to individual investors rather than Peak6’s professional trader clientele. “And we thought why not design a better trading experience?”

Why not, indeed? While brokers, from Charles Schwab & Co. down to the smallest regional firm, offer the ability to execute trades online, design has rarely been considered a key ingredient in figuring out how those website pages should appear to the investor. And when it comes to options—complex financial instruments that allow investors to bet on whether a security will gain or lose value at a particular time—the amount of data involved made Hass and his co-CEO, Danny Rosenthal, throw up their hands.

At that point, they approached Gong Szeto. “If we could clone him, we would,” says Rosenthal. “He is transforming the way we handle and analyze all the data we need in this business.”

That’s unusual praise to heap on a designer, which is Szeto’s calling. Like most other service providers whose labors don’t translate into obvious profits, designers and their products are often viewed by Wall Street firms as nice but not vital to business success. But then Szeto, 40, a graduate of the University of Texas’s architecture school, isn’t exactly your classic design geek. Not only has he made his reputation working with advanced communications technology, but he has also studied subjects ranging from accounting to intellectual property. “There is an unfortunate gulf between the financial world and the rest of the world, and I’d like to be able to help bridge that,” he says.

Rosenthal first encountered Szeto when the latter was chief creative officer at Rare Medium Inc., a publicly traded company that develops websites and other technology solutions for corporate giants such as Goldman Sachs. When Peak6’s founders first came up with the idea for OptionsHouse, Rosenthal remembered Szeto’s technological knowledge and design skills: “I could conceptualize things, but Gong is intellectually curious,” he says. “He wants to do more than just design something; he goes the next step and develops a whole concept and solution.” Szeto had just relocated from New York to New Mexico, and it took two years to woo him. What ultimately convinced the designer to spend every other week in Chicago, he says, was “the incredibly appealing professional challenge of designing a total trading platform in a way that made transactions simple and rational.”

Szeto’s background in architecture helped him deal with some of the initial hurdles: “It allowed me to think about systems, and how different elements interrelate and interact.” That, in turn, made it at least conceptually easier to work within the complex trading universe, where a well-designed system doesn’t just look good but meets all the technical requirements and keeps regulators happy as well.

The project’s essence was to transform the enormous amount of data options traders need to make informed decisions into a visual display that would be simple to access and understand. Investors dealing in options have to be aware not just of a stock’s price but also of what’s happening to the prices of a wide array of possible options on that stock. Since each stock option gives the holder the right to buy or sell the stock at a particular “strike” price on a specified date, the potential combinations of dates and prices can be vast.