Spot Trading LLC is an options prop trading shop founded in 1999 that trades on 11 options exchanges. It has grown from an initial team of 5 members to around 200 currently. The company focuses on long-term options trading with some high-frequency trading. Profits can be highly variable depending on market conditions like volatility. Spot Trading emphasizes technology and research in order to gain trading advantages.

1. Spot Trading llc
Carl Kershaw

2. Overview
Options prop shop
➔ No outside investors
Trading on 11 Options exchanges
➔ CBOE, AMEX, ARCA
Primarily long-term options, some HFT

3. Finances
● Prop shop - no transparency
● Haircut to measure risk
● Profits highly variable
● Delta neutral book
● Thrives on stable volatility

4. History
● Founded 1999 by Rob Merrilees
○ On-floor trader
○ Moved to off floor equities
● Five member team - grew to ~200 now
● Focused on technology
○ Started the same time as electronic trading

5. What is “hot”
● Short term VX (VXST)
o New product
● Market Maker designations
o Saves on commision, etc.

6. Secret Sauce
● Traders don’t get commision
o everyone is one team
● Breadth of field
o expand into new markets...
o but no OTC products
● Research
o in-house, not Bloomberg
● Technology focus

7. Story
● Interned
o well treated
● Revolving door
● Strange environment for devs

8. Competition
● Other prop shops
○ Akuna
○ Belvedere
○ Wolverine
● The market
○ Low volatility
○ Irrational actors

9. Predictions
● Up
o Market expansion
● Down
o Slimmer margins - Low Vol
o More regulation - HFT especially
o Public opinion