The Magazine for Securities Industry Professionals

Table of Contents

Four of the six charges against former NYSE chairman Richard Grasso have been overturned regarding his $187.5 million compensation package. The final outcome?

Grasso will settle the case
NY State will not pursue the case
Grasso lost his reputation, regardless
Not Spitzer's worst decision but up there

Previous Polls

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Buyside Snapshot

Boot Camp for Traders

Michael Scotti
James Hill's first preparations to run a trading desk happened long before he took the reins one year ago as head of equity trading at Hartford Investment Management Co. (HIMCO). The analytical process Hill learned from his military training in the Army has paid dividends in trading for the passive and quantitative manager overseeing $6.7 billion in equities. "All of the discipline and organization that come from the military totally translate to this job," says Hill, a 1989 West Point graduate who fought in the first Persian Gulf war. He also earned an MBA from Duke University before landing on the international trading desk in 1996 at Lehman Brothers. There he made markets in Asian ADRs and later in Nasdaq stocks at Fidelity Capital Markets.

Trading's New Playground

Michael Scotti
Trading and living in sunny St. Croix, U.S. Virgin Islands, might entitle some Canadians to hardship pay. After all, there's no ice hockey, no ice skating, no Grey Cup and certainly no sub-freezing temperatures in this tropical paradise. But don't count Acadia Fund's Andrew Bell in that group. "I thank God that I'm here every day," says the Ottawa native who's headed trading since 2005. Acadia is Miller & Jacobs Capital's on-shore hedge fund. The parent manages $200 million in equities, and also sub-advises on two mutual funds.

Using the New Trading Tools

Gregory Bresiger
Don't overlook using new electronic trading tools or new venues. But be very careful in the process. That's the philosophy of Patrick Elias, a trader at BNY Mellon Wealth Management in Pittsburgh. The 35-year-old trader says he's young enough to owe no loyalty to traditional means of execution. So he has adapted his trading techniques-like everyone else. Elias estimates that he will likely do so again. Indeed, change comes as less of a shock to this 10-year veteran than it does for those with more experience, Elias says.

Opportunities through TCA

Michael Scotti
Trade-cost analysis (TCA) will become more important to the buyside. TCA will also become a more valuable tool to lessen the costs of trading. Those were the opinions of 99 buyside trading professionals in a Traders Magazine survey on trade-cost analysis conducted 13 months ago. In fact, 78 percent of those polled said that TCA will not only get better as a predictive tool, but nearly 60 percent said it will become a larger part of their compensation formula. That survey foreshadowed some of the strategies chronicled in last's month's cover story, "Old Dogs, New Tricks." The feature outlined how two large buyside shops-AllianceBernstein and Morgan Stanley Investment Management (MSIM)-are supporters of using quantitative tools in their quest to trade stocks more cheaply and efficiently.

Bravo, Bravo for High Touch

James Ramage
At a time when electronic trading has developed deep roots, Michael Crockett of Brazos Capital Management still favors picking up the phone and talking to his brokers. And as the Dallas-based firm takes mostly a hands-on approach to trading growth stocks in the mid-, small- and micro-cap areas, that means Crockett works the phone quite a bit.

GE Asset Looks to Close the Information Loop

James Ramage
After 21 years at GE Asset Management, Damian Maroun has developed a good sense of what's expected from the trading desk. The senior vice president of global equity trading says his desk must provide information that gives portfolio managers an edge in today's marketplace.

New Desk, Familiar World

James Ramage
When Mark Schlarbaum became Global Capital Management's sole trader in April, he knew some things about his job would be different. "You can get a cup of coffee," he says. "And if you have to go out to lunch, you can." But he knew a lot of what he'd be doing for Global Capital would be familiar-and that's trading small-cap stocks, his specialty. Schlarbaum had spent most of his career doing that at investment giant T. Rowe Price, sometimes handling 50 orders a day and constantly interacting with a platoon of portfolio managers and analysts. His days at Global Capital, in Conshohocken, Pa., aren't as hectic-he could find as few as five orders on his desk on a given day. But he still has clients and analysts who demand his A-game.

Utasi Recaps STA & Issues

Michael Scotti
Outgoing Security Traders Association chairman Lisa Utasi exudes enthusiasm about the business of equity trading. In a recent interview with Traders Magazine, Utasi reviewed the issues that traders face today, as well as her experience in the last year. Change in equity trading was expected as a result of Regulation NMS and the New York Stock Exchange moving to automated executions, she says. Still, traders were caught off guard.

Quantifying Volatile Markets

Gregory Bresiger
Sometimes quants and their models fail, says Chris Erfort, head of equity trading at Twin Capital Management, a quant fund outside Pittsburgh. Erfort, who is also the firm's portfolio manager, says August's volatile markets were a prime example of panic selling.

Balancing Act: High vs. Low

Gregory Bresiger
Trading is up and research is down when it comes to the commission spending at the industry's biggest money managers.

Taking Change in Stride

James Ramage
After 35 years in any business, one can be excused for facing dramatic change with anxiety. But when one's tenure has been in trading and asset management, as Robert O'Brien's has been, skepticism should be a foregone conclusion.

Reinventing the Status Quo

Michael Scotti
Top traders today must be perpetual learners. They need to learn more about other asset classes. In short, they need to keep reinventing themselves.

Passive-Aggressive Trading

Sarah Rudolph
Some say it's difficult for equity traders to add value in today's electronic marketplace of penny spreads. But Tereck Fares, CFA, director of equity trading at Chicago Equity Partners, isn't one of them. "There's a lot of money riding on trading," Fares says. "There's plenty of money to be made and plenty to be lost."

In Traders We Trust

Michael Scotti
U.S. Global Investors has faith that its trading desk adds to the firm's overall performance. Traders at the San Antonio-based money manager have discretion to add to or reduce existing positions, based on how stocks move in the marketplace. That's unusual, since mutual funds typically don't give their desks the same leeway a hedge fund or a proprietary trading desk would have.

TCA: Caveat Emptor

Nina Mehta
When it comes to transaction cost analysis (TCA), the tail shouldn't wag the dog. TCA shouldn't supersede the careful decisions a trader makes to achieve a portfolio manager's objective.