Trading Against Robots

Discussion in 'Wall St. News' started by ZZZzzzzzzz, Jul 1, 2005.

  1. Goldman fires 30 equities traders as electronic volumes rise

    29/06/2005 09:44:00 Goldman Sachs is firing about 30 traders in response to declining margins and increased electronic trading of equities.

    The Wall Street investment bank says the cuts reflect market preferences for either 'low-touch' electronic trading for routine large volume order flow or 'high-touch' large value trading requiring more input from human traders.

    Goldman says it will transfer more of the functions performed by its US stock traders to sales/traders who are better equipped to help clients make informed choices about whether to execute their trades electronically or via the trading desk.

    Michael Ryan, the firm's co-head of global equities says about 50% of trades and trading decisions made by Goldman's clients occur through computers and other automated, or algorithmic, strategies that bypass traders in the firm's offices.

    The firm recently announced that trading revenue had dropped 22% in the second quarter of 2005 compared to the second quarter of 2004.

    (No wonder Goldman fired 30 more equity traders – more than 50% of their trading done by robots now.)

    NEW YORK, June 30, 2005 -- The New York Stock Exchange today released its weekly program-trading data submitted by its member firms. The report includes trading in all markets as reported to the NYSE for June 20-24.

    The data indicated that during June 20-24, program trading amounted to 76.3 PERCENT of NYSE average daily volume of 1,751.0 million shares, or 1,335.5 million shares a day.
  2. nitro


    Thanks for the post.

    Extremely interesting.

  3. can you source/link the article pls.
  4. Ok:

    Take a moment to think about who the "average" Goldman client is, and what kind of order to buy or sell they are likely to implement. Are they 1000 share daytraders? or are they investors looking for basket or block execution?

    Sorry, I have to get back to work.

    Good luck guys.

  5. institutional.

    thx, z.
  6. JackR


    A little more info:

    From - Extracts by JackR

    NEW YORK -(Dow Jones)- Goldman Sachs Group Inc. (GS), in another indication of the low profitability of equity trading, is firing about 30 traders in a move that it says is aimed at better serving clients.. [snip]

    Commissions have been declining 6% per year for 30 years, according to a June 24 report from Sanford C. Bernstein & Co. Wall Street firms in the cash equities business are being forced to spend heavily to improve their trading technology, to narrow their customer base to active clients such as hedge funds that make big trades, and to trade for their own accounts, it said. [snip]

    About 50% of trades and trading decisions made by Goldman's clients occur through computers and other automated, or algorithmic, strategies that bypass traders in the firm's offices, he said. [snip]

    Wall Street firms generally make less money committing their own capital to help clients make trades, preferring instead to act as an agent by sending client orders to exchanges or other market-makers. Helping clients with automated trading is a "low-touch" function that requires high volume to make it profitable, as opposed to "high-touch" functions in which traders participate in riskier transactions.

    There have been a number of articles and papers published about "algorithmic" trading.
  7. Choad


    No big deal. 100% of my trading is mechanical! :p
  8. LOL. Nicely put steve :D
  9. As far as algorithmic trading goes, the Good Stuff remains unpublished until it fails miserably and is of no value. However, most good firms would not even publish that in order to not give away any info that has taken many years to acquire at great cost.

    The stuff you'll find in publications is written mainly by academics (interpret this as you see fit).

    The stuff you'll find published that can be of some use - under the "algorithmic trading" umbrella - would be things like "VWAP/TWAP strategies" etc...
    #10     Jul 1, 2005