EXCLUSIVE: Cboe CEO Says Robinhood Growth 'An Eye Opener,' Unpredictable 2024 Election Could Increase Market Volatility

CBOE (BATS:CBOE) CEO Fred Tomczyk shared his excitement for upcoming product from Robinhood Markets (NASDAQ:HOOD) and put an emphasis on retail investors during an exclusive interview Thursday with Benzinga.

Robinhood Growth: Since taking over the role of CEO of Cboe in September 2023, Tomczyk said not a lot has surprised him other than the impressive growth of Robinhood, a company that announced several new products Wednesday.

It was the demand for technology and access to data and the growth of the retail trader that surprised him the most about the markets over the last year since stepping from the Cboe Board of Directors to the CEO role.

Cboe is the parent company of the Chicago Board Options Exchange and BATS Global Markets. The company announced Wednesday that Robinhood customers will soon be able to trade Cboe’s index options on the S&P 500, Cboe Volatility, Russell 2000 and Mini S&P 500 indexes.

The Cboe CEO said he was aware of Robinhood, but was surprised by its market growth.

"I never realized they were growing so fast," Tomczyk said to Benzinga’s Zunaid Suleman. "That was an eye opener for me."

Robinhood unveiled index options, futures and the Robinhood Legend platform at the 2024 HOOD Summit, where Tomczyk spoke to Benzinga.

With the new products, Tomczyk said Robinhood is "trying to take that place as the innovator and disruptor," comparing the broker to broker of old that dominated the space.

"They're really moving into the active trader space."

Read Also: Robinhood Q2 Earnings Highlights: Revenue Beat, EPS Beat, Crypto Revenue Up 161% Year-Over-Year, Gold Subscribers Hit 2 Million

Cboe CEO On Risk, Volatility: The Cboe CEO acknowledged that trading companies go through ups and downs and the importance of having products and services to help investors trade through any environment.

It’s important to be focused on the long term and the secular growth trends during constant ups and downs, he said.

While many non-investors or new investors may think of options as a risky trade, Tomczyk reiterated their purpose.

"The roots of options are in risk management, not speculative," Tomczyk said. "It's a risk mitigation tool."

For options beginners, Tomczyk said it's important to know the differences between them and key terminology and to take education offered by brokerages. Tomczyk suggested investors could try paper money trading in options to try out strategies first.

What's Next For The Markets? Asked for an outlook on what is coming for the markets over the next 12 months, Tomczyk couldn't help but point to the importance of the 2024 election, as presidential elections often bring high volatility.

"I think this one's no different," Tomczyk said. "This one's unpredictable."

Investors will likely trade based on the uncertainty of the election and the questions about the geopolitical environment, which is why the VIX (Cboe Volatility Index) is rising, he said.

For CBOE, Tomczyk said the focus over the next 12 months is focusing on investments in technology, investments on the retail side of products, innovation on derivatives and providing data and solutions to traders.

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