4. Financial Info
• No public information on proprietary
trading financials
• Wolverine Asset management has
approx. $5.52 billion assets under
management in 7 funds
5. History
• Founded in 1994 by two Michigan grads
• All early software was Visual Basic in
Excel
• Entire industry has changed from floor
trading to electronic trading
6. What’s Hot?
• Supporting increased markets
– Hong Kong, Singapore, London
• Supporting complex order types, penny
options
• Regulation
7. Secret Sauce
• All technology solutions built in-house
• Dedicated team for trader input with
extremely fast turnover
• Flat structure and fast agile development
practices across the board
• In-house finance and software education
program
Hello everybody, my name is Kyle Wilson and I will be talking to you today about Wolverine Trading.
Some general information about Wolverine trading.
Wolverine trading is a proprietary trading firm, commonly referred to as a “prop shop”.
A proprietary trading firm is a firm that trades financial instruments with the firm’s own money as opposed to that of external clients/investors.
Wolverine is headquartered in downtown Chicago and has satellite offices in New York, San Francisco, and London.
Wolverine has around 300 employees.
Wolverine Trading is made up of three main sections.
The core of the business is the proprietary trading I mentioned on the previous slide. The focus of the proprietary section of wolverine is in options market making.
Market making involves quoting both bid and sell prices for a financial instrument (in this case options). Wolverine makes money through the buy-sell spread and
by optimizing which exchanges to place orders on.
Wolverine has also developed a full service broker-dealer (provide research, tips, access to purchasing instruments) called Wolverine Execution services. Commonly abbreviated as WEX.
WEX provides floor access and a suite of the proprietary trading platform developed for the proprietary trading part of wolverine.
Wolverine also has an asset management section, WAM, that is located in the same office building as the rest of Wolverine but is chinese walled off from the rest of the company.
WAM uses and develops its own software products.
Because wolverine trading is primarily a proprietary trading firm, there is no publically available information regarding the amount of assets under management.
When I was an intern, we were given a chance to sit and talk to the forex traders and they had to answer a lot of questions like “secret number” or “magic number”
Because we were not allowed to know any specific details.
However, thanks to SEC filings, we can figure out some information about Wolverine asset management. It has approximately 5.5 billion in assets under management in about 7 funds.
Sources:
http://investment-advisors.findthebest.com/l/35852/Wolverine-Asset-Management-Llc
https://www.nfa.futures.org/basicnet/SearchResults.aspx?type=firm&firm=WOLVERINE
Wolverine trading was founded in 1994 by two Michigan graduates. This influence is pretty apparent. Obviously the name and logo colors have a Michigan theme.
The entire Chicago office is actually Maize and Blue.
When wolverine first started, one of the founders was a floor trader and all of the companies’ “software” was continuously revised visual basic code in Excel.
Since the late 90’s, the entire options trading culture has changed dramatically from floor-based trading to electronic trading. When I had my internship, we were given
a tour of the CBOE (worlds largest options exchange) floor. The standard unit on a floor is called a pit which is basically a mini-stadium where a bunch of traders trade the same product.
CBOE probably has at least 50 physical pits and there are pictures on the walls of the entire floor packed. Today, the only pit with a lot of activity is the VIX pit. The forex pit is also about half full.
Otherwise, the entire place is pretty much empty with giant racks of monitor mounts. I heard the CBOE is considering remodeling the floor to reuse all of the empty space.
Because of the proprietary nature of the firm, big changes or movements were not disclosed to the interns.
I know that a lot of effort is going into building required infrastructure for increased markets in Hong Kong, Singapore, and London.
Another feature in the pipeline was support for the buying and selling of penny options in the trading software.
Wolverine’s secret sauce lies in the fact that all software is built in house. If traders have a good idea for a new algorithm or configured view, there is a dedicated
team that turns around requested applications in a few days.
Wolverine also has a great culture for developers and getting features to customers (in-house and out-of-house) as quickly as possible. All software teams within the proprietary
trading section utilize an agile development methodology and software teams are flat.
Wolverine also has an in-house education program to allow employees to learn about the financial markets and/or new technology developments being implemented at wolverine.
Wolverine also provides a means for developers to give seminars about development practices or technologies they think should be integrated into wolverine.
Working with partners:
Wolverine has nine partners
All of the partners work full hours in the Chicago headquarters
Didn’t even know some of the people I was working with were partners
Realized who the partners were at the “Lunch with partners” event about 3 weeks before the end of the internship
Steve worked about 3 desks away from me and was that “nice guy who always held the door open for me coming back from lunch”
Our daily standups had a few extra employees who were there to see how our team was progressing (they relied on our developments)
One time I was talking to one of them about how I felt the intern offerings for the financial classes were too limited (weak). I found out he was a partner. (Matt?)
Expiration parties on the third Friday of every month
Company buys out a bar, everything is free
Great opportunity to meet a lot of other software guys, traders and quants
Just don’t do anything stupid (looking at you, tony)
Annual party (not quite like wolf of wall street)
Market makers and Prop shops
For the most part, Wolverine’s future is the same as other players in the industry. Market expansion is good for business and Wolverine has been active in preparation.
SEC regulation is generally bad for the industry. However, wolverine doesn’t really place much of a focus on high frequency trading, which is one of the areas of finance
that the media has placed scrutiny on for lack of regulation.
For the most part, Wolverine’s future is the same as other players in the industry. Market expansion is good for business and Wolverine has been active in preparation.
SEC regulation is generally bad for the industry. However, wolverine doesn’t really place much of a focus on high frequency trading, which is one of the areas of finance
that the media has placed scrutiny on for lack of regulation.
