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January 2, 2014

Shaking Things Up

By By Phil Albinus

Phil Albinus

The year ahead is a big one for traders on the trading floor. We are entering 2014 with some jarring contradictions: Firms are flush with money, but slow to hire, and the economy in the United States is slowly improving despite an unemployment rate that remains stuck at 7 percent. On Wall Street, the Dow Jones Industrial Average is reaching new heights despite the fact that market volatility is locked around 2 percent. While no one wants to go back to the months and the years following the collapse of 2008, the markets of 2010 and 2011 saw such profound market swings that even risk-loving hedge funds were looking for safe harbor. [IMGCAP(1)]

Fast-forward to today and the only market volatility seems to derive from one-day trading crises like trading glitches or unexpected economic news. Of course, traders cannot plan for trading glitches, rogue algos or flash crashes; instead, they must prepare for opportunities in other markets. This is where emerging markets like Vietnam and sub-Saharan Africa grow in interest and trading strategies like high-frequency trading gain more allure.

In this issue of Traders, we profile John Caron, the director of equity trading who joined the venerable Boston buyside firm Loomis, Sayles in July. At Loomis, he oversees six traders who have to manage and leverage opportunities in a stubborn and contradictory market. Caron is an equity veteran with a quant background and he has some keen views of what he expects from his trading technology and his sellside and brokerage counterparties. For instance, he takes us inside how he and his team grade their broker-dealers and their research.

Also in this issue, executive editor Peter Chapman highlights the New York Stock Exchange's plan to build its own dark pool. It seems that as they fight these unlit trading venues, NYSE has decided to join the dark pools at their own game. Speaking of exchanges in changing times, Nasdaq CEO Bob Greifeld shared his thoughts on evolving market structure and what happened when the market maker went down for three hours in August. Managing editor John D'Antona Jr. takes us inside what institutional brokerage and algo provider Weeden & Co. is doing these days. What is the buyside asking for in their trading formulas? John shares their insights.

This is executive editor Peter Chapman's final issue with Traders. After 14 years of writing for and editing these pages, he has decided to take some well-deserved time off. We wish him well in his future endeavors.

 

Phil Albinus

Editor, Traders

@philalbinus on Twitter

 

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