Why are big banks cutting trading jobs in the current very long bull market?

[Windlesham1]

Interesting, my thoughts are as interest rates drop, obviously banks profit margins will drop too. So im guessing they need to cut cost and cutting speculative traders seems like the way to go.

Also volume in the markets seems to be low so im guessing they can't put on the size they need.

Overall, It will be interesting to see if this trend makes volume/liquidity even lower than it currently is.

bank margins increased- Plus they find new ways to fleece the vulnerable -it's about alog trading -or 'buying' as we call it! These idiots have not know a bear market,and they won't know it when it hits them either-same old story

 

[murray t turtle]

Interesting, my thoughts are as interest rates drop, obviously banks profit margins will drop too. So im guessing they need to cut cost and cutting speculative traders seems like the way to go.

Also volume in the markets seems to be low so im guessing they can't put on the size they need.

Overall, It will be interesting to see if this trend makes volume/liquidity even lower than it currently is.

%% True too. QQQ volume is still fine , about 30 million/day.About average for summer. BUT down from some 90 million+/ in bear of 2000, 2001, 2002...………………………………...

 

[ETJ]

For the banks, it's not that much - on the trading side - about agency business. That has become too price competitive. It's more about their principal - facilitation business. That where their remaining money in trading is.

 

[murray t turtle]

For the banks, it's not that much - on the trading side - about agency business. That has become too price competitive. It's more about their principal - facilitation business. That where their remaining money in trading is.

%%
That + credit cards...…………………………………………………………..

 

[kmiklas]

Algo trading and automation replacing traders.

 

[murray t turtle]

Algo trading and automation replacing traders.

%% At big banks any way;
but not @ my home/office,

 

[Sig]

bank margins increased- Plus they find new ways to fleece the vulnerable -it's about alog trading -or 'buying' as we call it! These idiots have not know a bear market,and they won't know it when it hits them either-same old story

Funny that "these idiots" are rich and you are not, isn't it?

 

[GRULSTMRNN]

Not quite a fair assertion. It might be true that the average guy in a front-office trading desk at a bank might be more intelligent than the member you referenced or others, however, most of the times the average track record of bank traders who trade prop is lousy at best. Making markets is not a fair comparison as traders at banks take advantage of flow information and do not really make discretionary trading decision (for the most part). Example, most prop bank traders did not make a dime during the last financial crisis, they performed relatively incredibly well if they came out flat.

Funny that "these idiots" are rich and you are not, isn't it?

 

[Sig]

Not quite a fair assertion. It might be true that the average guy in a front-office trading desk at a bank might be more intelligent than the member you referenced or others, however, most of the times the average track record of bank traders who trade prop is lousy at best. Making markets is not a fair comparison as traders at banks take advantage of flow information and do not really make discretionary trading decision (for the most part). Example, most prop bank traders did not make a dime during the last financial crisis, they performed relatively incredibly well if they came out flat.

Actually it's eminently fair and my entire point. The "idiots" are doing what makes money and he is not. That they're not making money predicting bear markets is perhaps indicative that they're smart enough to realize that's a fools errand!

 

[GRULSTMRNN]

That I can only strongly disagree with you here, and I think I have slightly more experience in this particular field than you do. The huge majority of guys in this field are privileged and blessed with free options. Take on a lot of risk and be right and get paid well, or be wrong and get fired and knock on another door a few months later. That is the name of the game in most cases. You can't compare market making with prop trading, period. And that prop trading and taking risk is not a "fool's errand" is proven by how eager banks are to get back into the prop game. Come on, you know better I think...

Actually it's eminently fair and my entire point. The "idiots" are doing what makes money and he is not. That they're not making money predicting bear markets is perhaps indicative that they're smart enough to realize that's a fools errand!