Ilia Bouchouev is the President of Koch Global Partners. For the past twenty years Ilia Bouchouev has been managing the global derivatives business for Koch Industries, the world’s second largest privately held company. Koch’s derivatives group operates globally with trading desks in New York, Houston, London and Geneva with the focus on energy trading. Ilia also serves as a President of Koch Global Partners, proprietary trading group specializing in trading foreign exchange and interest rate derivatives. Ilia has PhD in Applied Mathematics, and has been a regular speaker at various industry conferences.
Aside from his prominent role, he is perhaps best known for his innovative options-pricing model developed during his PhD study in the late 1990s. Bouchouev’s highly acclaimed model and 1997 paper “The inverse problem of option pricing” address one of the major shortfalls of the seminal Black-Scholes options-pricing theory, and are widely recognized for their contribution to derivatives markets.
He joined Koch Supply & Trading as a quantitative analyst in 1997 and was part of the quant team that developed the first weather derivatives later that year. He went on to launch the energy market’s first volatility swap in 2003 and helped spawn and develop the market for calendar spread options.
However, nothing prepared him for the scale of structural change that swept through the oil derivatives markets in the wake of the 2008 financial crisis, he says. “Suddenly our tried and tested quantitative fundamental oil models stopped working and we were left scratching our heads,” he recalls. “Oil was clearly being driven by something other than physical supply-and-demand fundamentals.”