Why Wall Street Traders Are On The Decline

Discussion in 'Wall St. News' started by mfocus, Feb 9, 2020.

  1. mfocus

    mfocus

    From CNBC:



    Buying and selling stocks or bonds used to happen on the phone, in person, or in the packed trading pits in Chicago, New York and London. Prestigious investment banks boasted of trading desks the size of football-fields. Now, they’re losing money on trading operations and laying off scores of traders.

    The number of trading, sales and research jobs at the Top 12 banks in the United States have dropped precipitously in the last nine years. In 2010, those big banks employed about 21,000 people who worked in equities — or stocks — and 27,800 people who worked with fixed income, or bonds, according to research firm Coalition.

    By the third quarter of 2019, those banks employed about 16,000 people in each category, a drop of about 5,400 jobs in equities and nearly 11,600 in bonds.

    The shift to electronic trading and passive investing are big culprits behind the trend. Now more and more big Wall Street names are finding it harder and harder to make money from trading. The rise of passive investing and algorithmic trading are squeezing profits in the trading business to razor thin margins.
    So what’s happening to Wall Street’s once prestigious trading profession?
     
  2. SanMiguel

    SanMiguel

    It's moving more into automation for sure but you still need people to code, strategize, etc.
    Some of the big banks are also moving more into wealth management and cutting trading desks after the risks of 2008. Becomes more portfolio management than proprietary trading
     
    DallasCowboysFan likes this.
  3. Cuddles

    Cuddles

    how old is this report? 2002?
     
    lovethetrade, VPhantom, d08 and 3 others like this.
  4. themickey

    themickey

    What's happening about the fax machine, I couldn't buy one the other day?
    index.jpg
    FAX8360P-A4-Mono-Laser-Fax-Machine.jpg_350x350.jpg
     
    remogul92 likes this.
  5. d08

    d08

    I blame these darn computers and the internet. It was such a great system before when a select few were shouting with spit flying and shoving each other on a trading floor. It was so good, why did they change it.
     
  6. zdreg

    zdreg

    Would you rather drive a car or a horse and buggy?
     
  7. themickey

    themickey

    Women look cool riding a horse.
     
    murray t turtle likes this.
  8. zdreg

    zdreg

    horse and buggy go together as one term. There are 2 million citations in google search for "the term "horse and buggy."
     
  9. zdreg

    zdreg

    Then there were traders/market makers who complained vociferously when spreads narrowed from a.05 to .01, as if it was the end of markets. It did not happen and markets became more liquid.
     
  10. newwurldmn

    newwurldmn

    I believe computers are to blame for the decline in returns for institutional money.


     
    #10     Feb 9, 2020