EXCLUSIVE: Fintech Experts Tackle Market Risks, Emerging Trends At Benzinga New York Event

In a compelling panel discussion at Benzinga’s Fintech Deal Day event held in New York this November, industry experts gathered to delve into the complexities of managing market volatility and strategizing effective risk management.

The panel, moderated by Renato Leonard Capelj from Benzinga, featured insights from Michael Green of Simplify Asset Management, Kris Sidial of The Ambrus Group, and Kaitlin Meyer of MIAX. They explored a range of topics, from the shifting trends in fixed allocation frameworks to the burgeoning influence of new trading platforms and products, such as 0DTE options, highlighting the evolving landscape of the financial market in 2023.

Green initiated the conversation by pointing out the rising trend of fixed allocation frameworks in the market. He added a cautionary note, stating that such rigid frameworks could be problematic as they often fail to address a crucial question: which is more attractive, bonds or equities?

He elaborated that the trading patterns observed in 2022 were largely marked by a sell-off in the bond market. Comparatively, products like the Vanguard Total Stock Market Index Fund ETF VTI and the Vanguard Total Bond Market Index Fund Admiral Shares have experienced more lateral movements over the years. Green further noted that the current market scenario is somewhat unique, with a noticeable rise in the supply of bonds.

Meyer highlighted that the introduction of new products in the market is largely driven by demand, underscoring how market accessibility has significantly increased. “A lot of that can be attributed to access and [if] you think our markets have never been so accessible … Robinhood has 23 million clients, and so they are looking for opportunities,” she added.

She went on to discuss how the demand for new products is fueled by people seeking opportunities and flexibility. She pointed out the emergence of a new generation in the market, stating, “that wants instant gratification, so they want the exposure to the markets, you know, there's a push to 24/7 trading.”

Shifting the focus to 0DTE options (Zero Days To Expiration), contracts that expire at the end of the trading day, Sidial pointed out potential issues with how market participants are increasingly using these options. He observed that there is more volatility selling now than ever before.

He added that in today's options market, it's quite apparent that most strategies are being utilized for generating passive income, a trend Sidial sees as potentially hazardous on its own.
“It is very well known there is risk and there is a lot of volatility in the market,” adds Sidial.

Meyer, meanwhile, added that the demand for various products is clearly reflected in the data, evident in both the options and 0DTE markets, as well as in the futures sector. “I think there's no limited demand for new products.”

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Photo: Pratya Jankong