David Gershon had studied superstring theory. Yet on a currency-options desk at Barclays in London, a much more earthly question kept getting in the way: what was the price? Answering it meant calling brokers. For someone trained to wrestle with the architecture of the universe, this was an unusually repetitive use of a telephone.
That irritation became the opening for SuperDerivatives. Gershon wanted an online service that could put usable market prices in front of people who needed them. The work would take him from a bank’s trading floor into running a company, and eventually into a transaction worth approximately $350 million. But the telephone problem is a better place to begin than the cheque. It explains what he was trying to fix.
A physicist changes the question
The first career he imagined was in physics. His doctorate at Tel Aviv University concerned superstring theory, and he added business and finance to his education. His studies included the Kellogg School of Management at Northwestern University. The academic route had given him mathematical tools; finance offered somewhere very different to use them. He moved to New York in 1994, worked at Deutsche Bank and then Barclays, and eventually headed exotic currency options in London.
There is a particular pleasure in the distance between those subjects. Superstrings ask what the universe is made of. A currency option asks what someone should pay today for a contractual right involving an exchange rate later. Both require models. Only one regularly arrives with a client waiting for a quote. Gershon had moved into a profession where an elegant answer also had to survive contact with a market.
He retained an affection for the mathematics he was challenging. “The Black-Scholes model is magnificent,” he said during SuperDerivatives’ early years. His objection concerned the distance between a theoretical valuation and a price at which people actually traded. That distance gave the fledgling company its task. A calculation could be intellectually respectable and still leave a dealer reaching for the phone.
The initial service was deliberately narrow: foreign-exchange options. Its website launched in January 2001. By the end of that year it had more than 1,000 users across more than 250 institutions. Those figures make an appealing counterpoint to the subject’s complexity. A highly specialized product had found hundreds of institutional doors to enter, without first promising to repair the entire financial system.
Six banks, six answers
Gershon’s explanation of the customer’s predicament was admirably concrete. In an article he wrote for corporate treasurers in 2002, he described the possibility of asking six banks for an exotic currency option and receiving six different prices. Much of this business happened over the counter, without a single exchange screen supplying a common reference. A treasurer seeking protection from currency movements could have a difficult time judging the offer.
He also understood the usefulness of an everyday analogy. Drivers do not need to understand every mechanical detail of a car before setting off. In his account, users of options similarly needed confidence in a price before choosing a strategy. The analogy reveals a commercial instinct alongside the technical one. He was trying to make specialist knowledge usable by people whose actual job was something else.
That required more than posting a formula online. SuperDerivatives approached market-making banks first, then smaller banks, corporations and hedge funds, and bank sales teams. The sequence mattered: a new pricing service needed credibility among people who already knew the market, and usefulness among people with less direct access to it. Mathematical confidence alone would have been a rather lonely sales department.
- CollectMarket inputs from brokers and other contributors
- CalculateModels and analytics turn inputs into valuations
- DeliverOnline tools put the information into users’ hands
The people beneath the calculator
The unglamorous discovery was that the model needed information that was difficult to obtain. SuperDerivatives developed a data operation in which staff contacted brokers around the world. Some inputs came electronically; others arrived by email or telephone. The supposedly frictionless online answer rested partly on people doing the patient work of asking questions and collecting responses.
Gershon’s early backer Lew Ranieri recognized the potential for a financial-information business. Customers did too. When SuperDerivatives surveyed clients after several years, market data emerged as a service they especially valued. The calculator on the screen and the information beneath it belonged to the same business, but customers could have different reasons for paying attention to each.
By 2010, Gershon’s company was selling much more than its first foreign-exchange benchmark. It offered portfolio revaluations, front-office analytics, position and data management, and hedge accounting, with offices on five continents. He explained that offices supported clients while products were sold over the internet. That distinction shaped the economics: a global customer base did not require every installation to become a large local project.
The expansion is easy to lose inside a list of products. Its significance was in the working day of the customer. A price might be needed before a trade, again when reviewing a portfolio, and elsewhere when accounting for an exposure. Gershon had begun with one recurring question. The company kept finding adjacent occasions on which an institution needed an answer it could use.
The company grows beyond its first screen
The distribution model was practical as well as technical. A 2007 account of SuperDerivatives’ commodities offering described annual licensing rather than an outright software purchase. The expanding coverage included energy, metals and agricultural products. For Gershon, the original currency question had become a repeatable business problem across markets: how to provide prices and tools to professionals who needed to work with them.
By July 2014, the DGX market-data platform had passed 100,000 users. DGX Direct could stream information into customers’ own systems, while the SDeX execution platform had gone live that May with at least 30 banks committed to providing prices. The route from viewing a valuation to using information elsewhere was becoming shorter. Gershon was competing for a place in the infrastructure of financial work.
On October 7, 2014, ICE completed its all-cash acquisition of SuperDerivatives, announced at approximately $350 million. The offering then covered risk analytics and systems across interest rates, foreign exchange, credit, equities, energy and commodities. ICE wanted the data and technology alongside its trading and clearing operations. The buyer’s interest made sense: information is useful to an exchange business well beyond the moment someone looks at a quote.
Approximate announced value of ICE’s all-cash acquisition of SuperDerivatives.
Recognition followed the work. In 2012, Gershon entered the Inside Market Data Hall of Fame. The honour fitted a founder whose company depended on gathering information as much as calculating with it. His professional identity had widened: physicist, trader, company builder, and now a figure in the market-data industry. Each title described a different part of the same operation.
There is a useful restraint in remembering the original task. A pricing system could help someone compare an offer or review a position. The decision still belonged to a person at a desk. Gershon’s contribution was to give that person another instrument for doing the work, with information that had previously required considerably more effort to assemble.
An exit, then a classroom
Gershon’s return to academic life brought the earlier chapters into the same room. At the Hebrew University of Jerusalem, his subjects include fintech and entrepreneurship. He also continued researching options pricing. In a 2018 explanation of his work on the volatility smile, he described seeking an approach that applied across currencies, interest rates, commodities and equities. The former founder was still occupied with the mathematical question underneath the product.
The Gershon FinTech Center opened in 2018, supported by his five-million-shekel donation. It is named after his parents, Sima and Shlomo. Its purpose reaches beyond research papers: helping fintech businesses grow, connecting entrepreneurs with experienced mentors, and bringing technology companies into contact with institutions that might use their work. A center in a university could give those encounters a regular home.
His teaching also ventures into sales and marketing. “Marketing starts when you identify your target audience, and relevant communities,” is the line attached to one of his public lectures. It fits the history of SuperDerivatives. An invention needed an audience capable of recognizing its value; the audience needed a reason to trust an unfamiliar supplier. The founder who had worked on pricing models had also learned to think about the people receiving them.
“Marketing starts when you identify your target audience, and relevant communities.”David Gershon
Another beginning, this time in your pocket
By June 2024, Gershon was discussing another venture, KashCash, with former SuperDerivatives colleagues Yuval Levy, Ariel Shub and Udi Sharim. This time the question concerned everyday payments: moving prepaid money through a phone, including for people paying without a credit card. The intended user had changed considerably from the specialist currency trader. The need to persuade people to adopt a financial tool remained familiar.
His interests outside work complicate the picture pleasantly. He has long expressed an enthusiasm for paintings, sculpture and art history, saying that an exhibition could be worth a flight. In 2024 he also described an ambition involving options and art. Even his diversions seem capable of acquiring a pricing problem. An exhibition ticket may be a modest expense; the idea encountered on the way home can demand rather more attention.
The career has an unusual circularity. A student who once pictured a life in physics went into finance, built a technology company and returned as a professor with trading and operating experience to teach. Then another venture called. Gershon keeps finding situations where an abstract financial idea meets somebody’s inconvenient daily task. The broker’s telephone was an early example. A phone carrying spending money offered him another place to begin.