October 1, 2013

A New Trading Day

A New Trading Day

By By Phil Albinus

Last month was the five-year anniversary of the near collapse of the global economy -- and today's traders have been pushing forward ever since. The past few years have given us a federal bailout, a grinding recession, Flash Crashes large and small and electronic trading speeds that would amaze Albert Einstein. The men and women who cut the deals in the major investment houses on Wall Street and beyond are deploying new technology like never before.

It's been a turbulent time for the industry. When the banks grudgingly accepted the TARP bailouts, the CEOs made sure that they paid themselves and their top traders' lavish bonuses. They believed that if they didn't pay the bonuses, the traders would leave to start their own hedge funds. Many did - and many failed. Several start-up funds and prop trading firms started by star traders have crashed and burned. As the operator of one hedge fund that flamed out put it, it was closed for "lack of interest." Further, new regulations such as The Dodd-Frank Act have pushed for greater transparency that now force firms and trading practices into the light of day.

In this month's Traders we shed light on the firms and their trading practices. Our cover story reveals the efforts of head trader Scott Wright to restore the badly damaged AXA Rosenberg to its former glory. For a quant shop, this asset management firm is looking beyond algorithmic trading to restore its reputation that was nearly destroyed by a scandal. What are Wright's secrets? He's working with smaller brokers and executing more trades in a hands-on fashion.

Managing editor John D'Antona Jr. takes us inside the launch of IEX, a new ATS that is owned and operated by the buyside but is aimed at the sellside. In the past, the sellside offered everything from order management systems to trading venues in exchange for the buysides' business. But as John reports, there's a new wrinkle in the buyside/sellside relationship. Speaking of trading venues, John also looks at FINRA's new rules that shine a light into dark pools. The regulator wants to set rules for these unlit trading venues that traders love, exchanges loathe and lawmakers do not quite understand.

As the new editor of Traders, I am pleased to be part of such an august publication. Traders has been around for decades and its coverage is respected throughout Wall Street. I invite you to check out our daily news on tradersmagazine.com and follow us on Twitter at @Traders_Tweets.

After all, news doesn't happen every 30 days.

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