Modern Money SmartPod
Modern Money SmartPod
Road Trip: CME Group's Julie Winkler Discusses Data Trends and the Continued Rise of Retail
The continued growth of retail trading has been a hot topic this week at the 50th annual International Futures Industry Conference in Boca Raton, Florida. CME Group Chief Commercial Officer Julie Winkler stopped by the show to discuss what the exchange is doing to meet the needs of increasingly sophisticated retail traders. At the other end of the retail spectrum, Winkler shared details about CME Group's Trading Challenge, which introduces new investors to futures markets.
Winkler also outlined ways CME Group is leveraging its partnership with Google Cloud to not only make data more accessible to traders, but also build out its matching engine's disaster recovery site.
(Note: This transcript was created using AI. It has not been edited verbatim.)
Sean McMahon 0:06
ello everyone, and welcome to the Modern Money SmartPod. I'm your host, Sean McMahon, and this week we're coming to you from the International futures Industry Conference in Boca Raton, Florida. Right now I'm joined by Julie Winkler, the Chief Commercial Officer for CME Group, Julie, how you doing today?
Julie Winkler 0:24
I'm doing great. Thanks for having me. Sean,
Sean McMahon 0:25
It's been a wild and long week here. Boca, things are just about to wrap up. So what are some of your key takeaways from this week?
Julie Winkler 0:34
Well, I think, as always, it's wonderful being in sunny Florida. So another great conference in the books. You know, 50 years, long time to celebrate for FIA. I think there were a number of themes that came up in my interactions with the industry and clients this week. The first is that, you know, it's certainly been a period of a lot of uncertainty in the markets. And I think probably, you know, 10, 15, years ago, when we got this conference, there would have been a lot of people jumping out of meetings to go, you know, try to fix problems or things at home. And so I just think it's the robustness of the infrastructure that has been put in place that we can handle this type of volume, this volatility. Clearly, there's a need for risk management like never before. And yet, you know, here we are putting up contract volume, 67 million contracts one day last month at CME Group. And you know, I think there's a lot of optimism. And so I also hear that in people's voices, a lot of talk about capital efficiencies and what else we can be doing. So we spent a lot of time talking to customers about what comes next with our cross margining arrangement with FICC how we're going to be extending that to clients very excited about that, and also Securities Clearing, even with the mandate being pushed back, we have had a lot of great discussions with our firms about the need to continue to push ahead with that initiative. And so what I like is that there's still new product and innovations. There's new things coming, there's optimism, there's investment, and that certainly has been a very positive thing. And the last one lot of talk about retail, that has not always been a focus of this event. And you know, you just look around you see who's sponsoring events, the retail session that that Ninja Trader sponsored, nearly every seat was taken up, and it was a great opportunity to just kind of hear from some of the people that have been here for a long time thinking about this industry and how this is our fastest growing customer segment. It's been growing over the last 10 years at over 10% last year, we saw Total Participation up dramatically as well as it's a huge source of new clients for the industry. And so I think kind of it's those three themes all bundled into one that's been keeping me pretty busy.
Sean McMahon 2:52
Yeah, I like what you said there about, you know how amid all the news and tariffs and volatility, industry leaders can still come here and stay in the room and talk to each other, and I think that's kind of a it speaks well of all the investment that's been made in the past few years and in things like infrastructure and data management and things like that, I hadn't thought about that until now. You didn't see people bailing out to go handle, you know, put out the fires. But let's talk a little bit more about data. So obviously that's a huge challenge to amass all this data and kind of get it in ways that you can share it with your clients and so they can leverage it. So what's CME Group doing on that front?
Julie Winkler 3:23
For us, we've been on a journey the last few years getting a lot of our data into the cloud, which is extremely important, and I think certainly with the advances of Gen AI and the adoption we're seeing really across many industries, the fact that we've been able to move a lot of that data into the cloud, have it in a central place. That's been pretty critical for us to start piloting and working with some of those new things. It is certainly and continues to be a critical element for customers to start their trading journey with us. I think probably one of the more interesting things is one we've been able to advance our benchmark and index business term. Sofr now is being used as the underline for trillions of dollars worth of loans, so that's a relatively new initiative for us. And then also just looking at how retail traders are becoming far more sophisticated in their use of data, and we're seeing a lot of good uptake from the non professional side of data consumption and working with our retail partners to make sure that they're putting our data in front of customers. It's great because it's it's one of those leading indicators as we think about people's intention to trade. They have to have the data first, and so it's always a great marker for us. It's a good indication of client interest. It's certainly a lot for people to manage. I think in general, it still is kind of one of those frictions in the industry in terms of your ease of onboarding and trying to navigate all of the exchanges, different policies in a more seamless way. So my hope is in conferences to come. I. That will have some better solutions for the industry on that front.
Sean McMahon 5:02
And then you mentioned how retail traders are becoming more sophisticated. Are you seeing any other trends that you're noticing about shifts in the way that retail traders are accessing or or managing their their positions, versus the institutional side?
Julie Winkler 5:16
The sophistication has dramatically increased. You know, that really has been something post COVID, as people have had more time access to better data and analytics, it's just allowed them to, I think, process, have access to more products than they've had before. And I think it's that social learning aspects that retail customers are far more attuned to, you know, you've got platforms out there like trading view. We recently did a trading challenge with them. You know, we had 60,000 participants in just a few weeks that came online. And so when you can create those social learning communities, retail traders, I think, are a little more apt to understand or follow what someone else is trading as a means to kind of get familiar with it. On their own side, don't see that as much on the institutional side, where people are extremely protective for very good reasons, on their trading strategies. So that's that's probably one unique difference, and also just how much more embedding we are doing with our retail partners in terms of the education aspects of it. You know, institutional traders are going to learn about our products in different ways than than retail is. But there's some neat things out there in terms of how they're embedding AI into some of their digital coaching on their online platforms that I think is is kind of neat. And you know, also just people's use of more of these simulation environments. That's a trend that you know, we've seen over the last few years as well, allowing people to kind of try out futures get, again, familiarity with that data before they actually open and fund an account.
Sean McMahon 6:54
Okay, tell me a little bit more. You said 60,000 participants in the trading challenge. So tell me more about the trading challenge.
Julie Winkler 7:01
Yeah, so it was an opportunity for, you know, people to come in. There's small amount of prize money allowed. They set up an account, and they were exposed to a trading futures environment, all just in a in a mock kind of trading challenge. So these are challenges that we host, typically, every year, even on our own trading simulator challenge for things like university students, and we even use it with some of our institutional clients as a means to kind of help them train their employees on how futures work. So this was just done in collaboration with trading view that we've been a partner with for a long time, just a way to reach a new community where we're tapping into traders that probably had no experience whatsoever in actually trading futures.
Sean McMahon 7:46
That sounds cool. I have to check that out. I wasn't familiar with that. Gonna ask you to look into a crystal ball right now. And if we get together next year at the 51st FIA Boca, what are gonna be the hot topics that are gonna be front of mind for CME Group?
Julie Winkler 8:01
I think there still will be a lot of talk of retail. You know, we have been working very closely with a lot of partners that are what we call new to futures. So as we look across the globe, either regulatory changes, the customer experience getting really kind of perfected in mobile applications, their use of data. I think we're going to see even greater traction in that over the next year. You know, we hope to be live pending regulatory approval with some of those institutional grade cross margining benefits and a Securities Clearing House. And by then, even in advance of the mandate, we hope to be live with customers and get some testing going there. It's going to continue to help fuel the kind of the next phase of growth for us. So we'll have that live and again by the end of the year, we will have some testing being done in our DR site for our move to the clouds, for our matching engine. So more to come on. That lot to get done in a year,
Sean McMahon 8:56
Lots of exciting stuff. So I look forward to connecting with you next year and see how it's all going
Julie Winkler 9:00
Great to talk to you. Thank you.
Sean McMahon 9:03
Well, that's our show for today, but before I get out of here, one last reminder, be sure to watch for more episodes of this podcast as we bring you all the news and headlines from the 50th annual International Futures Industry Conference in Boca.