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Momtchil Pojarliev
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Some Like It Hedged

BNP Asset Management's Pojarliev discusses a variety of options to address foreign currency exposures. Although there is no single best-practice solution for addressing foreign currency exposures, institutional investors have three main choices, he says.

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August 1, 2013

A Program Trader's Rise

By Alan Rubenfeld

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In the beginning, his knowledge of technology, developed as a student at the University of Michigan, served as both curse and blessing. He got his start in program trading at Morgan Stanley. "I was assigned to what I thought was the worst job ever-plugging cables on the equity floor," Radtke said. "It was awful, setting up workstations and moving boxes." However, working on the equities floor enabled him to work as a trader under David Baker, then Morgan's head of program trading. "David needed an assistant to help with client interfacing, and I was essentially the only person on the floor used to getting yelled at by him."

Morgan was ahead of the curve when it came to program trading technology in the early 1990s. It was the first firm that allowed clients to access their mainframe and use Morgan's program trading applications in real time to execute baskets. These trading tools quickly became popular. Morgan was also able to link additional products and services together: "Not only did we offer client connectivity, we also garnered their prime brokerage and international trading businesses as well. We offered the client a one-stop shopping solution. Morgan was definitely ahead of its time," Radtke told Traders Magazine.

That became clear early on. In 1995, the Connecticut Retirement Plans and Trust Funds decided to simultaneously hire around 15 external portfolio managers, and the fund turned to Morgan Stanley to execute the trade.

See Chart: Top 10 Program Desks 

"We executed the trade over several days while simultaneously enabling the fund to remain fully invested in its benchmarks," Radtke said. "This was the first transaction where a broker successfully marketed both its transition management and portfolio trading capabilities into a single product. It was a huge success."

After five years at Morgan Stanley, Radtke's world changed. In late 1996, virtually all of Morgan's senior program trading and derivatives management departed en masse for NatWest Securities. Radtke was soon in demand: "David called me at home, asking me to join him at NatWest. They tripled my pay overnight, and the next morning I was working at NatWest."

"However, this was a big risk," he said. "I was leaving the top program trading team at the premier brokerage firm at the time. I was also leaving a position where all of senior management had resigned, leaving me with significant upside. However, my former Morgan colleagues had big ambitions for NatWest, to immediately become the number-one program trading shop."

Unfortunately, the move to NatWest was not exactly smooth sailing: "We didn't realize we were joining a three-ring circus. The firm had zero infrastructure. We had to go to RadioShack to buy our telephone equipment. We had to literally hijack an ISDN [high-speed communications] line from another building occupant to connect to our main execution server. One time we thought we had a power outage. Turns out it was caused by a maintenance man who tripped over the power chord in the server room. Despite the obstacles, we created one of the top PT desks in less than one year."

When NatWest imploded as a result of a trading scandal in London, the group was sold to Deutsche Bank Securities, another foreign firm trying to establish a beachhead on Wall Street.