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November 24, 2009

Formal Agenda
• Introduction & Announcements

• Remarks from Dr. David Gershon
Remarks from Dr David Gershon

• Presentations from
The Recanati Alumni Association: The Alumnus's Life-long Companion
The Recanati Alumni Association - home to over 17,000
7, graduates off the Faculty
g y off
Management, Tel Aviv University, among them - leading figures in Israel's business
 Networking events with leading figures from the business
world and the academy
 Industrial tours
 Career workshops & placement services
Reuven Chemi Zohar  The first and only Israeli chapter of Beta Gamma Sigma –
Covent Peres Zisapel The international honor society recognizing business
excellence since 1913
 Debate Club
 A
l ffaculty
lt jjournall
 Chapters abroad: New-York, Boston, Chicago and Silicon
Hagi Erez Guy
Golan Vigodman Rolnick

Dean – Professor Asher Tishler
Director of Global Relations & Development – Ms. Irit Kassif
Director of Alumni Association – Mr. Jonathan Penn
Alumni Relations Coordinator – Ms. Yafit Cohen-Hadari
Project Coordinator – Mr. Ofer Lifshitz
About Greylock
• Founded in 1965 and currently on 13th fund (just closed, oversubscribed at $575M USD)
• The firm is based in San Mateo (Silicon Valley), with offices in Boston, Hertzliya and Bangalore
• Key US investments include:

• Greylock began investing in Israel in 2001, and opened a dedicated fund in 2006 of $200M USD
Israel Team Israel Portfolio
DS Apex Mergers & Acquisitions
DS Apex Mergers & Acquisitions

• Investment banking arm of DS Apex Holdings Group
• Advice on mergers & acquisitions and private fundraising
• Partner offices across Europe, North America, South & Central 
America, Asia, and Australia
• CEO, Yair Ephrati

• DS Apex Holdings Group 
• M&A and private fundraising, underwriting,  brokerage, and 
asset management
• $12 Billion under management 
• Leading underwriter of both debt and equity on 
• Member of and traded on the Tel Aviv Stock Exchange, and part 
of the Tel Aviv 100 Index


I d
Industry P
f i l

Students / Alumni

j g , y g y
To join our mailing list, leave your card in the badge you return

Who’s Here
The goal of FinTechIsrael
goal of FinTechIsrael is to bring together Israeli Startups, 
is to bring together Israeli Startups
Industry Professionals, and Investors to foster innovation in the world 
of financial services”

Our Focus
The Plan

Speakers. Startups. Networking. Every 8 Weeks.

Website. Blog. Twitter. Facebook & LinkedIn Groups.

Affiliations with NetBanker. BarCampBank. MIT Forum. 
Seeking Web Journalist(s)
• Help develop content on 
Help develop content on
the FinTech space, 
including commentary 
and interviews with
and interviews with 
Israeli firms/startups

Seeking Site Designer
Seeking Site Designer
• Work on further 
developing the site and 
build better features for
build better features for 
our membership

Join Us. Help Us. Spread the word.
PayPal X Developer’s Challenge
$150K prize to best Applications
• Paypal’s Open API and ‘Adaptive Payments’ service allows teams to build
sophisticated payment applications leveraging Paypal’s payment infrastructure
• Adaptive Payments is a money movement service that can be adjusted according
to your business needs
• Specifically, the service allows for:
– Modular Approval: Allows businesses to determine the order and mechanism in which
they obtain payment details and approval; Web, mobile, future or custom future approval
methods are possible
– Pre-Approval: For one-time, multi-use and subscription payments (including an optional
configurable PIN identification)
– Parallel and chained Payments: Single payment to multiple receivers, ideal for
marketplace payments, multi-merchant checkout, and commission-based payments

More details can be found by contacting:

Oded Zehavi
Manager of Paypal Israel
and South Africa or by
y visiting

Dr. David (Dudi) Gershon
Founder and CEO of SuperDerivatives

P t P iti
Past Positions
• Global Head of FX Exotic Options for Barclays Capital, UK
• Options Trading at BZW New York (became Barclays 
Capital) & Deutsche Bank

• PhD in Theoretical Physics
• MBA and MSc in Finance

About the Keynote
Transparency and d efficiency
ffi i
in the global derivatives market

David Gershon
March 2009

Copyright © 2000-2009 by Super Derivatives, Inc. SuperDerivatives Proprietary and Confidential.

Please do not distribute in any manner without SuperDerivatives' prior written consent.
About me

• In May 2000 left Barclays to start SuperDerivatives.

• Until May 2000 -Global head of exotic options at

Barclays Capital in London.

• Previous positions on Wall Street:

- Head of emerging markets at Barclays NY
- FX options trader at Deutschebank NY
- Mortgages derivatives at Nationsbank (now Bank of
e ca)

• Ph.D. in Theoretical Physics (Superstrings theory) –

Tel Aviv University
• M. Sc. in Finance - Kellogg School of Management
• MBA major in Finance - Tel Aviv University

November 09
p (

• A global technology and service innovator providing

multi–asset derivatives analytics, data and business
process tools for all derivative market participants

• Our ambition is to become the undisputed global

category leader for products and services delivering
information and transparency to the derivatives market

• Offices in London, New York, Tokyo, Singapore, Sydney,

Hong Kong, Mumbai and Tel Aviv

November 09
SD history and milestones
• First pricing platform was launched in January 2001
– An internet platform to price currency (FX) options
– First financial application for banks on the internet
– By June 2001 we had Merrill Lynch, Bank of NY, Bear Sterns and
Commezbank as paying clients.

• 2002 First tier one bank roles the platform globally

– After the merge of JPMorgan and Chase the FX business took SD system
for all the sales people and traders globally (150 licenses).

• 2003 – Distribution agreement with Reuters

– In 2003 we signed a distribution agreement with Reuters- the biggest
player in FX.

• 2004 – From pricing to risk management

– The launch of a full fledge risk management system to handle accurately
the complexity of exotic options. First software as a service (SaaS) risk
management solution for currency options

• 2005 - From
F single
i l assett to
t multilti assett
– In 2005 we launched our pricing & analytics platforms for interest rates,
equity, commodities & energy.

November 09
History and milestones – Cont’
• 2006 – On-line execution capabilities
-We launched our on-line execution platform for options. The
web solution is used either as an internal (sales – traders) or
t l ((clients-
li t sales)
l ) application.
li ti

• 2007 – Launching credit derivatives

– In mid 2007 we launched our pricing & analytics platforms for
dit derivatives-
d i ti th “hottest”
the “h tt t” market
k t then.

• 2007 – Creating a business unit for revaluation

– Aft
After we d
l d th
the capabilities
biliti tto price
i credit
dit d
i ti we
became a leading player in the global revaluation market with
the capability to price any derivative.

• 2008 –Multi
Multi asset risk management platform ‘light’
light ;
CRM system for financial institutions
– In mid 2008 we launched our ‘light’ multi asset risk management
platform aimed as a low cost solution.
– Leveraging
g g on this technology
gy we also launched a client
relationship management (CRM) system for banks sales people.

November 09
The Issues SD Addresses
• There are many option classes within each asset –Foreign exchange,
commodities, interest rates, equities, energy and credit

• The market lacks transparency: a large percentage of the OTC

market participants deal in options without fully knowing the prevailing
market price

• The cost to build in-house solutions is prohibitive and the expertise is


• Customers at all levels are more sophisticated requiring an increased

focus on accuracy and efficiency to increase productivity within banks

• There is no published model that can accurately reflect the market at

all times

• Market participants would like to use real market prices when they
price,, risk manage
p g and evaluate their positions

November 09
SD pricing solutions
• Trusted, independent pricing
– Real-time, accurate, multi-asset pricing for all structures
g a unique
through q and pproven methodologygy
– Across FX, equities, commodities, energy, interest rates and
– A true reflection of real market prices (bid & offer)

• SD’s built in models and market data reflect fair

market value of priced derivatives, enabling:
– Sales teams to give indicative pricing for the widest range of
asset classes and instrument types in a quick and intuitive
– Traders to obtain reference prices while negotiating with
– Treasurers to obtain an accurate price reference point when
getting a quote from a bank

November 09
SD markets coverage
• Wide coverage – from vanillas to advanced instruments

SD enables standardisation of derivatives structures across the

following asset classes:

– FX: extensive range of currencies including major (G7) and emerging

markets and illiquid currency pairs

– Interest rates: major and emerging markets

– Equities: >3,000 single stocks and all major indices in all major

– Energy: Oil and Oil products of the world’s largest refineries, natural
gas in numerous hubs, electricity in Europe, US and Australia,
emissions, coal.

– Commodities: precious and base metals, agriculture and soft

commodities in all global exchanges and markets

– C
edit >1500 single names and all majo
major indices

November 09
SD Products
• Richest derivatives coverage
– Multi asset derivatives expertise
– Comprehensive model library

• Access to all
– Banks, funds, corporates, custodians and auditors
y and sell-side
– Services for both buy-
– Including multi-asset reference data

• Market innovation
– Multi-asset derivative analytics,
y risk, revaluation, productivity
p y and
performance, and operational support
– Global infrastructure servicing clients in every part of the world
– Business process tools for all derivatives market participants

• A global business
– Thousands of users in every region of the world
– Global and regional banks
– Derivative market convention expertise globally
– Scalable
Scalable, real
time infrastructure

November 09

• We provide fully automated portfolio revaluation services in all the asset

classes and derivatives types

• We provide on-demand analytics for middle/back office functions

• We provide customer revaluation of structured products and notes

• We anticipate significant growth in the revaluation business in the current


• We have a strong integration team that enables the flexibility to use the
client’s format.

November 09

November 09
The Target market
The total market size consists of about 120,000 derivatives
professionals, potential revenue of $2B per year.

• Global, regional and local banks in all continents- 850+

• Alternative (hedge funds) and traditional asset managers-5000+

• Custodians and administrators- 50+

• Corporations
Corporations- 1500+

• Brokers- 10+

• Global and regional auditors-10+

• Regulators and Central Banks-20+

November 09
Our Business Model

• All our products and systems are web based (enables frequent,
seamless upgrades in an ever changing market). We only have one
system for all the clients (but extremely flexible and customizable)

• Our systems are sold on a subscription basis with annual renewal.

• Payment for a year in advance for the services

• Flat fee PER PERSON with unlimited usage of the system and free

• The fee for the Pricing and analytics systems is between $15-24k per
year The fee for the risk management system is between $150
year. $150-500k
per year.

• Revaluation services are sold on per-line basis

November 09
Business model - cont.

• We only do direct sales

• Huge investment in training of our sales force and R&D

• Monitoring constantly the performance of our sales people

• Extremely devoted to our clients

• Maintain a special “echo system” with our clients for constant feedback
on real time basis

• Provide our clients with delivery

y dates for feature they
y request
q (and
( at
no cost)

• We are the cutting edge systems in derivatives thanks to our

(demanding) clients

November 09
SD Key advantages
• Proprietary model that reflects
f interbank prices for
f derivatives

• Portfolio of products with multi-asset and cross-asset capabilities

• Solutions that are geared to increase customer productivity and


• Subscription model per person reduces up front cost

• Strong brand recognition

• Large client base in both the sell and buy side

• Strong client relationships and a great ‘echo system’ with our clients

• Global operations

• Hi
hl skilled
kill d employees
l with
ith extensive
t i knowledge
k l d off the
th option

November 09
2009: Focus on cost control and risk

• Renewed focus from the market on:

– Cost control
– Risk management
– Price transparency

• SD provides:
– Cost control – software as a service
– Enterprise workflow
– Discovery for fair market value – independent pricing
– Effective analysis of risk
– Independent portfolio valuation
– Tools to help sales desks increase productivity

November 09
Thank You

Copyright © 2000-2009 by Super Derivatives, Inc. SuperDerivatives Proprietary and Confidential. November 09
Please do not distribute in any manner without SuperDerivatives' prior written consent.
Arnon Dinur Yair Ephrati
Venture Partner CEO
Greylock Partners DS Apex Mergers & Acquisitions

About the Panelists

Intelligence  Constant

Human Information Saturated
Factor Experience

Perception ???
Emotional bias
Emotional bias
The Need
Brokerage firms spend several hundred USD to gain a new trader. 
However, 90% of new traders tend to wipe out their entire trading‐capital in 
the first few months of trading, mainly due to psychological reasons:
Emotions Cognition
Fear of loss ("loss aversion")  Perception
Confidence (under/over)  Information processing load
Stress Market awareness
Temptation to divert from plan Decision making
Competition with peers
ii ih Ri k M
Risk Management
Coping with mistakes Planning

The consequences:
• For the traders – loss of assets
• For
F theth brokerage
b k fifirms and
d platform
l tf
providers – loss of investment, and loss
of future commission
The Guardian Angel Solution 

Enabling traders to remain longer in trading, make more 
The Goal volume and more commissions

1. Handling each trader individually
g y
2. Measuring decision making effectiveness according to 
Principles market conditions
3. Providing ongoing feedback in real‐time
The Guardian Angel Approach
The Trader The System
I want to make money 1. Ongoing feedback on each
Did I do well? transaction and overall
Should I close my position now? performance

Where is the market going? 2. Support in known cognitive traps

I lost money – how do I get it back? Reassurance

Let’s try the 400! Alert
I can’t believe it… Pay attention to…
Trading Psychology Traps

Leverage & Risk

Value at Risk

Depth of Losses


The Business Model

Traders (end users) Clients Service provider (SaaS)


Monthly pay
per trader
The Retail Market

Traders (Global) ~20 million
Traders (Israel) ~25,000
Brokerage firms (global) ~8000
Annual commission
Annual commission per 
per 4000 $
4000 $
GA annual cost 60 $
Global market size
Global market size 1 2 Billion
1.2 Billion
Israeli market size 1.5 million
Thank you!

Oded Shefer, CEO
Minimize Exposure
Maximize Prevention

Facts of life … CC Fraud
Looking for a needle in a haystack – 1:10,000
• 9 out of 10 alerts turn to be False Alerts
• 70% - Undetected Fraud
• More then 5 Billion in the US alone.
L ki for
Looking f a chain
h i
A sequence is like a chain – easier to find them
and easier to validate if they are legal or not

More Detection with Less False Alerts

Tip …
• Sequence – 196,000,000 results
• Sequence of transactions - 2,830,000 results
• “Sequence of transactions” - 2 results

Sequences vs. Single Actions
1.5% 0.5% 5.3%

0.3% 8.2% 27%

MDA2 Unique Features

 Analytics
 Broader coverage
 Higher accuracy
 Model
 Constant update
 Customer level and up
 Rapid Implementation
 Based on historical transactions
 Rapid mapping methodology
 Expandable and Highly Scalable
 Multiple Parallel Processing (MPP)
 Use standard Blade servers
 Real Time

SeqUR – trying to do the unthinkable like

Detect card fraud in speed

Thank You!

Company Profile
November 2009
Mission Statement

To provide transparency on financial

d t throughout
th h t th
i lif
life cycle

A platform for financial advice.

Established business in the domestic market.

Providing transparency on structured

Fast growing business in the global markets.
Modelity/Structures Status Summary

Cli t validation
Client lid ti Market size
Existing clients of different At least 2.5B USD and
scales: tier 1-RBS, tier 2-Danske growing
Bank and tier 33-Tapiola

Proven technology
h l Promising pipeline
Sophisticated core engine
HSBC, JP Morgan, …
already in production
Modelity/Structures Architecture
Live Examples
» Live examples for Sales & Advice Support, and for Post
LaunchhSSupport at:
» Danske Bank
» Royal Bank of Scotland