Thomas Peterffy

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Thomas Peterffy born 29 September, 1944 is a Hungarian-born American billionaire businessman. He is the founder, chairman, and CEO of Interactive Brokers Group Inc.. He is the largest shareholder of his company; Interactive Brokers and he is fondly known as “The Father of High-Speed Trading.” According to Forbes he is the richest Hungarian, and the richest person in Florida with an estimated net worth of $19.1 billion as of June 2019 making him the 63rd richest person in the world.

Thomas Peterffy was born in Budapest, Hungary in 1944, in a hospital basement during a Russian air raid.  Due the harsh soviet rule, living in Hungary became very uncomfortable. Thomas abandoned his engineering studies and together with his father, Perenc Peterffy they emigrated to New York City as refugees in 1965. His father who was living with his second wife found it hard to accommodate his son. He gave Thomas 100 dollars and asked to him to make his living. The young immigrant Thomas was not so good at speaking English but had some engineering education. He eventually earned a bachelor’s degree from Clark University.

Peterffy began his career in the US as an architectural draftsman working on highway projects for an engineering firm. It was at this firm that he volunteered to program a newly-purchased computer, ultimately shaping the course of his future. Of his background in programming Peterffy said, “I think the way a CEO runs his company is a reflection of his background. Business is a collection of processes, and my job is to automate those processes so that they can be done with the greatest amount of efficiency.” His unusual mathematical mind, bordering on genius, was the vehicle that enabled him to create a career unprecedented in the recent cyber-history of Hungarians.

In 1977, after years of judiciously saving money, Peterffy purchased a seat in the American Stock Exchange (AMEX) and began trading equity options. During his career in finance, he has consistently pushed to replace manual processes with more efficient automated ones.  His mental prowess allowed him to write code in his head at work, code which he applied to computerized trading models after his work hours. From then on, his entrepreneurial spirit came into being — he founded his first company, T.P. % Co., in 1978, and his second, Timber Hill Inc., in 1982. A year later, Peterffy caused a major stir on the trading floor by using a hand-held computer, the first time it was ever used, for trading equity options.  His business related to his AMEX seat eventually developed into Interactive Brokers.

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By the dawn of the new millennium, Peterffy’s company — which had revolutionized the industry with computerized stock index futures and options trading system — had a global presence.  In 1987, Timber Hill had 67 employees that grew to 142 in 1992 and expanded to Switzerland in the same year.  The impressive increase continued into the UK, France, Italy, Germany, Spain, Norway, Austria as well as to Hong Kong and Australia.  In 1994, the Timber Hill Group LLC is formed as the holding company for all of Timber Hill’s operating companies. By the year 1997, Timber Hill boasts 284 employees worldwide. In 1999, Peterffy was influential in persuading the Securities and Exchange Commission (SEC) that US options markets could be linked electronically, which would ensure that investors receive the best possible options prices.  

He has also testified before the United States Senate Banking Subcommittee on Securities, Insurance, and Investment about adding banking regulations.In 2001, the corporate name of the Timber Hill Group LLC is changed to Interactive Brokers (IB) Group LLC of which he is CEO as well as Chairman. Today Interactive Brokers’ headquarters is in Greenwich, Connecticut, and it has approximately 880 employees in its offices in the USA, Switzerland, Australia, Hungary, Russia, Japan, India, China and Estonia.  Interactive Brokers Group and its affiliates execute nearly 1,000,000 trades per day.  Peterffy is often called the “Father of High Speed Trading” since he was the initial force in computerizing Wall Street

Peterffy’s company Interactive Broker Group is joint owner of OneChicago, an all-electronic exchange with Chicago Board Options Exchange (CBOE), and CME Group. It is a privately held company that is regulated by both the Securities and Exchange Commission and the Commodity Futures Trading Commission.  OneChicago currently operates the only U.S. based securities futures marketplace.

Peterffy was also involved in the founding of the Boston Options Exchange (BOX). BOX is an automated stock exchange owned and operated by the TMX Group. As an equity options market, it provides electronic order matching services to stockbrokers and traders. BOX was founded in February 2002 by the Boston Stock Exchange, Bourse de Montréal, and Interactive Brokers.BOX offers price improvement to traders through its patent-pending Price Improvement Period automated trading mechanism. PIP allows clients with broker guarantees on the first penny of price improvement a small period to improve upon available prices. In June 2007, BOX was named U.S. options exchange of the year by Futures and Options World Magazine. CEO R. Scott Morris attributed BOX’s success to the PIP algorithm, noting the “$110 million in savings to investors because of our price improvement model.”

Peterffy is not enrolled in any political party: he is an independent voter with a moderate Republican overtone.  But prior to the 2012 Presidential elections, he purchased millions of dollars’ worth of airtime to warn voters against impending socialist tendencies of our country in a video that aired on CNN, CNBC and Bloomberg.  The one-minute ad prompted numerous laudatory as well as disapproving comments.  One of his most repeated quote, from the ad, is:

“America’s wealth comes from the efforts of people striving for success. Take away their incentive with badmouthing success and you take away the wealth that helps us take care of the needy. Yes, in socialism the rich will be poorer — but the poor will also be poorer. People will lose interest in really working hard and creating jobs,”

Peterffy is also among the few billionaires who backed Donald Trump in the 2016 Presidential Elections. Having donated $100,000 to Trump’s election campaign, he said, “I think this election will determine the course of this country for a long time into the future. If we are going to continue on our current progressive course by appointing liberal judges and piling on more regulations and not simplifying the tax code, it will be very difficult to reverse at a later date. We are on a slippery slope sliding towards socialism.”He is divorced with three children. He is an avid equestrian. He lives in Palm Beach, Florida. In 2015 it was reported that he had listed his 80-acre Connecticut estate for $65 million.

At his age, Peterffy is totally active in his business.  He created Probability Lab to help his clients understand and participate in business decisions.