Q&A with Robert Krause of Demand Derivatives
A Revolutionary Futures Exchange and Clearing House Trading the World’s Major Assets in a Creative New Way (upon CFTC and SEC approval).
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How long will it take to launch and what needs to happen to get there?
Demand Derivatives needs roughly $2m to open the doors, $2m to attempt to make the launch successful, and $2m held in reserve as per CFTC regulations. Our first $2m is key as it will get us to the launch pad. To do so, we need to focus on four items: our regulatory filing, connecting to brokers, installing the technology, and proliferating our IP around the world. We expect to launch the exchange within one year after funding.
What is the top hurdle or risk?
Gaining volume. Starting a market is like an old fashion hand-crank airplane. It take a lot of effort to get things going, but after the engine starts, it generally runs on its own. Similarly, market needs to be force-started. But, as soon as there is volume, then liquidity builds from there. This is the reason we allocate $2m to our extensive pre-launch marketing campaign. We need these resources to make the launch successful. Many investors try to get entrepreneurs to launch on a shoestring. Such a strategy will not work in our case.
After the initial launch, are there any plans for expansion?
Absolutely! There are many ways to expand. When we first launch, we will use our three instrument designs on six major assets. After those initial product prove successful, we can expand with longer expirations, more strike prices, additional assets, and in other regions. For example, our RealGlobe product will allow for up to 39 country indices. In short, we are starting with the lowest hanging fruit (the top six assets on one exchange) and plan to quickly ramp up operations into a global empire (hundreds of underlying assets in a multi-regional conquest).
Robert Krause of Demand Derivatives
Robert Krause is currently the Chairman and CEO of Demand Derivatives Corp.
Formerly Chairman and CEO of The VolX Group Corporation.
Chairman and CEO of RealDay Options Corporation.
Founder and Managing Director of HFDDX Corporation.
Senior Vice President at Zurich Capital Markets.
Executive Vice President, Alternative Investments at Mitsui Commodities.
Vice President, Institutional Equity Derivatives at Morgan Stanley.
Commodity Trading Advisor Event Capital Markets.
Manager, Option Products Marketing, and Director, GLOBEX Marketing at the Chicago Mercantile Exchange (CME).
Mr. Krause graduated with a B.S. degree in Economics with an emphasis in math, macroeconomics, and derivative markets from the University of Illinois at Chicago. Mr. Krause wrote The Volatility Handbook and CME Futures and Options Strategy Guide. He patented listed realized volatility instruments and has patents pending in realized volatility indices, forward-starting daily options, limited risk futures, and other financial patents pending.
Contact Robert: Robert.Krause@DemandDerivatives.com