Madeline Daleiden

Madeline Daleiden asked for context on the capital efficiencies customers could realize when trading new shorter-duration equity risk management tools, such as single-name 0DTE, MAG 10 index, and binary options, in conjunction with legacy S&P index products.

Answer

Craig Donohue, CEO, and Rob Hocking, Global Head of Derivatives, explained that all these products are cleared through OCC, providing substantial capital and margin efficiencies due to portfolio margining and the multilateral benefits of centralized clearing. This allows for efficient trading by expanding the toolkit within existing risk verticals.

Madeline Daleiden, an Equity Research Associate at JPMorgan Chase & Co., inquired about the capital efficiencies customers could realize when trading new shorter-duration equity risk management tools, such as single-name 0DTE, the Mag 10 Index, and binary options, in conjunction with legacy S&P index stacks.

Answer

CEO Craig Donohue and Global Head of Derivatives Rob Hocking explained that all these products are cleared through OCC, providing substantial capital and margin efficiencies due to portfolio margining. Hocking added that expanding the product set within existing verticals, like introducing new tenors or products made of existing ones (e.g., Mag 10), allows for risk offset and capital efficiency within the same risk bucket at the OCC, making trading more efficient.

Madeline Daleiden, speaking for Ken Worthington, followed up on market structure legislation, asking about the potential impact on the stablecoin industry and Bullish's stablecoin promotion business if banks were to prevent intermediaries from paying interest on stablecoins.

Answer

CFO David Bonanno stated that based on current legislative drafts, Bullish expects minimal to no financial impact on its liquidity services business, citing specific carve-outs for liquidity providers to receive rewards. Chairman and CEO Tom Farley added that Bullish is generally fine with the bill as it stands, prioritizing its passage for the market clarity it would bring, which he believes is essential for the industry's growth and has been a factor in recent crypto price declines.

Madeline Daleiden followed up on market structure legislation, asking about the potential impact on the stablecoin industry and Bullish's stablecoin promotion business if intermediaries were prohibited from paying interest on stablecoins.

Answer

David Bonanno, CFO, stated that based on current legislative drafts, Bullish expects minimal to no financial impact on its liquidity services business, citing specific carve-outs for liquidity providers. Tom Farley, Chairman and CEO, reiterated that Bullish is generally fine with the bill as it stands, emphasizing that passing legislation is the most critical factor for bringing credible stablecoin issuers and broader market structure clarity.

Madeline Daleiden, on behalf of Ken Worthington from JPMorgan Chase & Co., asked about the significant growth in managing director headcount relative to overall headcount over the last year, questioning if it was a deliberate strategic shift. She also asked about specific business or sector focuses for future hiring.

Answer

CEO Scott Adelson attributed the senior hiring to the firm's attractiveness as a platform for top talent, stating they are always looking for great people across all product lines and geographies. CFO J. Lindsey Alley added that the disparity in growth rates is likely happenstance rather than a structural design and should revert to historical norms over time.