Book Review of Zero-Sum Game: The Rise of the World’s Largest Derivatives Exchange

Most people think of New York City as the world’s financial hub, but the reality is that increasingly critical pillars of global financial markets stand—and have always stood—in Chicago.  Zero-Sum Game is a very well-written, gripping tale about the largest M&A deal to date in the exchange industry—a 2007 merger between century-old competitors that took place in the Windy City and reshaped the financial services landscape.

It is the story of the takeover bid by the Chicago Mercantile Exchange (CME) for the world’s oldest futures exchange, the Chicago Board of Trade (CBOT), and the subsequent twists and turns and fierce battle that ensued when five months later, Atlanta’s IntercontinentalExchange (ICE) jumped in with a billion dollar higher bid for CBOT // (ICE is the same company that, with NASDAQ, announced an $11.3 billion hostile bid for NYSE Euronext on April 1 of this year.) Erika S. Olson (HBS ’03) was a managing director at CBOT in the middle of the takeover storm, and presents not only a behind-the-scenes look at the bidding war, but also an overview of the little-understood exchange-traded derivatives industry.

Honestly, you do not need to know anything about derivatives or exchanges in order to enjoy Zero-Sum Game. Olson tells the story in a conversational style from her vantage point on the merger team, and focuses on the personalities of the exchange executives and the cultures of the unique businesses they manage. This book would be equally liked by those who are completely uninitiated to the financial world and those who are finance savvy.  Zero-Sum Game is a highly engaging, humorous, fast-moving narrative that is sprinkled with pop culture references and easy-to-understand explanations for esoteric technical terms and derivatives industry jargon. (There’s even a short but funny conversation Olson had with fellow HBS alum and JPMorgan Chase CEO Jamie Dimon about what she learned while getting her MBA.)

In short, the story is entertaining yet educational. You get an insider’s peek into the tumultuous 117-day bidding war for CBOT, and learn how exchange-traded derivatives affect our daily lives—perhaps in a much more direct way than the investment banks that are always making headlines replica watches. Erika does an excellent job of helping readers get to know the very same businessmen and women who are currently working with the U.S. government to figure out how to head off another financial crisis. Zero-Sum Game is a must-read for anyone who wants to understand the fascinating world of derivatives exchanges or learn more about the larger-than-life personalities in control of this influential industry.

About the author: After graduating from HBS in 2003, Erika S. Olson spent three years working on the Bank One/JPMorgan Chase merger before joining the Chicago Board of Trade as its Managing Director of Marketing. Since the close of the CME/CBOT deal in mid-2007, Olson has enjoyed a new career as a freelance writer and film critic.


April 19, 2011
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