The Changing Face of Trading

Christine Sandler reviewed the recent STANY conference. She is Executive Vice President, Global Sales for NYSE Euronext. Ms. Sandler is responsible for all aspects of the company’s sales and marketing efforts to buy-side and sell-side customers. She oversees client relationships, manages the sales team, plans and executes marketing activities, and leads cross-selling activities for the company’s full suite of equities, fixed income, derivatives, and market information products throughout North America.

Surreal. That's the only way to describe world events as we began to talk about the panels we would organize to appeal to the New York trading community. We watched the bailout of the EU, a major bank failing its stress test and technology changes, such as the rapid rise of social media on the trading floor.

For this year's conference of the Security Traders Association of New York, of which I was recently named  president, we put together panels to highlight these changes, with trading experts who talked about the risks and opportunities they present.

Panelists including NYSE Euronext's Joe Mecane, Bank of America Merrill Lynch's Mary Ann Bartels and Paul Richards of UBS talked about systematic  risk, and the question of what is too big to fail? Other panels focused on the Volcker Rule, volatility and leveraged ETFs and trading options.

A panel including speakers from Citi, J.P. Morgan and OTC Link & MD Trading Services spotlighted electronic trading of derivatives, futures, fixed income and unlisted securities. One challenge highlighted: keeping up with regulations that differ by country. "Brazil has special issues around taxation, South Korea has unique issues around risk and they're always changing," offered one panelist. A question raised went unanswered but will continue to swirl around this community. What competition in clearing houses is going to look like in the future and how regulators will see those models.

I found discussion among panelists on the the changing face of the liquidity provider particularly interesting.  Moderated by TD Ameritrade's Christopher Nagy, the panel talked about how much easier it is to enter the trading business, and how succeeding has become much more difficult. "The business has been 'Home Depotized,' said Matt Andresen, co-CEO, Headlands Trading. He said success requires finding ways to compete with the community's equivalents of big box stores, which in turn requires investments in areas such as technology.

Competition didn't make the list when panelists were asked what scared them most. Here's how they answered:

  • Headlands Matt Andresen: the specter of unpredictable regulatory action, especially in Europe.
  • Goldman Sachs Head of Electronic Trading Greg Tusar: Investor confidence remaining low over time.
  • Two Sigma Securities' Simon Spenser: The economy. "You can't get way from the connection between the economy and markets," he said.
  • Knight Capital Americas' Joe Ricciardi: a fat finger mistake that crushes investor enthusiasm.

Immediately following the panel on liquidity providers came a panel on social media on the trading floor. My takeaway from that discussion was a participant's quotation: "when something happens, traders go to Twitter."

You can follow STANY on twitter.com/stany_newyork, NYSE Euronext is at Twitter.com/NYSE_Euronext