Executive Spotlight: Terry Duffy
BT: Can you please explain a little bit about CME Group?
Terrence Duffy (TD): CME Group is where the world comes to manage risk. We operate in 150 different countries and across four exchanges - CME, CBOT, NYMEX and COMEX – which offer the widest range of global benchmark products across every major investible asset class. Basically the risk of everything from the price of corn in your breakfast cereal, to the cost of crude oil, to the interest rates in a home mortgage are managed on our exchanges, where more than $1 quadrillion changes hands each year. Because our markets allow businesses and investors to plan for predictable prices, they are better equipped to take on new opportunities, act more quickly and decisively, grow their businesses and ultimately help reduce costs for consumers.
BT: Have you always known that you had an interest in finance/trading?
TD: I was born on the South Side of Chicago and my mom and dad didn't have much. Everyone in my neighborhood was either a fireman or a cop. I didn't want to have those jobs, but I figured it was my destiny. Then, while I was tending bar and going to school at the University of Wisconsin-Whitewater, I met a prominent trader named Vincent Schreiber who took me under his wing. I started as a runner in 1980, making $56 a week, and I realized I could see a future in this. My mom took out a second mortgage on my family’s house to help me buy a seat on the exchange, but months later I made a mistake and lost $150,000 in one day. I thought that was the end of my career and that I lost my family’s home. But Vince did something remarkable. He used his reputation to guarantee the fact I would pay the clearing firm back. It took me several years and three jobs. But I did it, and it changed my life and taught me tremendous discipline.
BT: CME Group recently announced plans to launch bitcoin futures later this year. Can you talk a little bit more about why CME is getting into the cryptocurrency space?
TD: It really comes down to client demand. Our customers tell us they were interested in this product as a trading opportunity and because of bitcoin’s use in commerce. We are the world’s largest regulated foreign exchange marketplace, so CME Group is the natural home for this new investment tool. Offering a futures contract on a regulated exchange brings a number of benefits to investors including transparency, price discovery and risk transfer – all of which will better enable market participants to manage their risk as the bitcoin market develops. It will also allow traders to hedge their cash positions in the digital currency, which to date has been difficult to do.
BT: Why should top college graduates consider a career in finance?
TD: I think young people should remember that there is a reason this business is called financial services. Graduates should know that finance is about making a real difference for large and small businesses all over the world. The best bankers, traders and investors have not only talented minds but empathy and insight into what makes people tick -- and the resources to help them prosper. Main Street doesn’t exist without Wall Street. And though I understand that this generation has come of age during the financial crisis, I want them to know there is still a lot of good that can be done in this industry.
BT: CME Group Foundation’s philanthropic efforts are focused on education, especially in STEM and computer science. Why is this important for CME?
TD: Because technology is at the core of what we do and everything we offer, preparing the next generation for the IT jobs of the future is a huge part of that. CME Group has always been a place for problem-solvers, big thinkers and those willing to challenge the status quo, and one of the key objectives for our company moving forward is encouraging a STEM talent pool that is both talented and diverse.
Through the CME Group Foundation, we support education from cradle to career, primarily in our Chicago community. The Foundation partners with universities, school districts, charter networks and nonprofit organizations that work to address a variety of challenges, such as ensuring access to early math and computer science education for disadvantaged students and underrepresented minorities. For example, we’re proud to be the largest donor to Chicago Public Schools' Computer Science 4 All program, a successful initiative to make computer science a requirement for graduation for every high school student in Chicago.