Marketplace for derivatives | cpjobs

Marketplace for derivatives

Published on Saturday, 25 May 2019

These days, when Christopher Fix flies into Hong Kong, it is generally all about business. As managing director and head of Asia-Pacific for CME Group, any visit typically centres on enhancing the firm’s position as the world’s leading marketplace for derivatives.

That’s where clients can trade futures, options, cash and various other products, which enable them to manage financial risk and capture investment opportunities. The available choices stretch across all major asset classes and can be based on anything from interest rates, equity indices or foreign exchange to oil, metals or agricultural commodities.

“My primary role is to ensure the platform is as strong as possible,” says Singapore-based Fix, who is leading initiatives to expand the group’s presence in Asia, build partnerships with regional exchanges, and develop benchmark products for current and prospective clients. “We run the markets in an even-handed, neutral way. We live or die by making sure we are in a position to move quickly to help our customers, but how they use the market is not for us to decide.”

He notes that, in a global economy with so many potential risks, companies may want to hedge against, say, perceived threats from Brexit, reduced access to markets, falling currencies, or tighter supply of raw materials from other parts of the world.

“They can use our futures contracts to mitigate violent price moves in the core underlying exposure of their business,” Fix says. “Customers need protection against things like oil prices, a dollar-based risk which is subject to swings, and the fluctuations in agricultural commodities linked to the China-US trade war.”

In practice, such clients may be in the retail, commercial or manufacturing sectors, but they are just as likely to be financial institutions, hedge funds or proprietary traders.

“People are looking to make money out of the market if, for example, they think US grain, hops or crude oil will go up or down,” he says. “Increasingly too, we see clients in Asia branching out into the global markets. That means New York and Chicago have to be aware of the 24-hour cycle and how announcements or events in Asia can now shift demand.”

Back in 1986, when Fix first flew into Hong Kong, such broad themes already fascinated him and, in a sense, were central to his trip. Arriving at Kai Tak, he walked across the border, on his way to spend 18 months at Beijing Teachers’ College as one of the first four exchange students from universities in New York. Not surprisingly, it proved to be a transformative experience.

“It gave me a very profound appreciation for China and a strong early belief that the country would be an important player on the global stage,” he says. “I went out to use my Chinese and spent most of my time on the trains, visiting Hohhot, sleeping on the city walls in Xian and, overall, having a wonderful time. I remember the rationing and shortages, but also how people’s attitudes to the west were changing. There was tremendous energy among the youth. I was deeply impressed by that and saw the inevitability of the rise of China.”

Even before that, though, when growing up in Kingston, a small town in New York State, Fix had wanted to know more about the world. His mother worked as a nurse and his father as a cash register repairman, but his own earliest ambition was to learn all the official languages of the UN and have a chance to use them.

Moving to Scotland for three years from the age of 13 to 16 was perhaps a start. That happened after his mother married a Scotsman, which led to living on the outskirts of Paisley, learning to play rugby, and being the only Catholic kid in his school.

“It was an adventure and definitely a very significant milestone in my understanding of different people,” he says.

Returning to the US to finish high school, he decided to pursue international studies and, in 1982, began a four-year BA in history and political science at the State University of New York at Binghamton.

“There was scope for these deep discussions, and it opened my eyes to the links between geopolitics and business.”

However, once back from China after the exchange, good jobs weren’t easy to find. So, with student loans to pay off, Fix signed on for a five-year stint as a US army reserve and, in parallel, did part-time and temporary office work in New York when his other duties allowed.

In one role, he trained as a paratrooper, did border patrols, and put out wildfires. In the other, he typed up minutes and meeting reports at 50 words per minute and for a very respectable rate of pay.

“Finally, in 1992, a part-time job took me into BNP Paribas,” he says. “I started in internal controls keeping files on credit proposals, but learned a tremendous amount from that clerical position. And that’s where I got into commodities. They needed risk officers to monitor traders, look into their accounts, and confront them when they took positions that were risky. I had the authority, as a former paratrooper, to tell them to manage their position.”

Things took off from there. The bank sent him to Paris for five years, initially to write their internal control policies in English, but that led to a futures market job. Back in New York, he learned the commodities and OTC business. And after spells with BNP in Singapore and as chief executive of the Dubai Mercantile Exchange, he joined CME Group in 2015.

Off duty, if not cheering on his son’s rugby team, Fix is usually immersed in a book.

“I think it is very important to pursue an intellectual life parallel to the one you have in business,” he says. “Right now, I’m reading about Caesar’s diplomatic struggle with the Gallic tribes.”

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