Commentary

David Weisberger
Traders Magazine Online News

Stop the BS & Promote Real Transparency!

In this shared blog, David Weisberger says a recent WSJ article is wrong and that traders do need to purchase faster and more comprehensive market data to avoid being fined for violating "Best Execution" obligations.

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Is information leakage a major concern of yours when you trade?



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November 1, 2000

Non-Stop World of Sales Trading: Liaison to the Buyside Must Know His Customer

By John A. Byrne & Sanford Wexler

Research sales are on a portfolio level. We make our calls very concise. They are on a trading level. We focus on the news in the stock in a very concise fashion. Research sales is a very detailed call to a portfolio manager. If we hear a pertinent fact about one of the stocks that our account owns, we can get right to them. We get right on the phone and talk to them about it.

Most of our job is service. The sales trader is the liaison between the buy-side trader and the sellside. I cover about 20 accounts actively. But I make calls all day long.

We are a small company. We trade only about 250 stocks, mostly Nasdaq. We can actively cover more accounts than the larger firms who trade thousands of stocks.

All sales traders go out visiting their clients as much as they can. Because you always want to put a name with a face or a voice with a face. It's always good to know whom you are dealing with.

In this business, bringing in new business is a 24-hour job. There are thousands of accounts out there that we want to cover. The bigger you get and the more stocks you trade, the more accounts you want to cover. It's a snowball effect. The more salesmen you need, the more research analysts you have to have.

ECNs are good for anonymous trading of five or ten thousand share trades. But it's a tedious job if you have a lot of other orders to do. That's where sales traders come in. I don't think they will ever replace personal relationships. I think ECNs have their place in our business. You are still going to need sales traders when you are working intense orders.

Christopher Mahler,

National Sales Manager, Weeden & Co.

Traditionally, sales traders were relationship brokers. Now, they are information brokers with relationships. Trust and relationships are the most important elements in doing a trade.

The role of the sales trader and their day-to-day jobs has changed in other ways. Traders have been forced to become more electronic and to access their client base using order management systems. Orders are delivered to sales traders electronically and back to clients electronically. The service and the speed are more intense.

Five years ago the markets were slower. You had time to interpret information. You had time to make an informed decision. Today, with so many different ways to deliver order flow, your reaction time is much, much quicker.

Before, you slowed things down to your pace. Now, there are multiple buyers and sellers. As a sales trader, you need to basically interpret supply and demand, know when and how to access alternative systems, you need to have greater market knowledge, and need to understand your client's portfolio. Portfolios have become much more diversified and so have strategies.