Emerging Markets Trader Tells Us Why He's Completely Getting Out Of Finance Amid This 'Pitiful' Market

trading desk

As you know, the markets have been slooooooowwwww lately. No volume. No movement at all.

It’s a brutal time for anyone on the sell-side, since this means a major lack of business.

In light of these times, an emerging markets equities trader on the sell-side we sometimes talk to has decided to quit the biz.

He let us interview him anonymously via DM on twitter.

To keep his anonymity, we’ll just called him ‘TRADER’.


TRADER: Just gave my two weeks notice, time for a new adventure… End of the month. Just didn’t want to be stuck in this job forever while the markets wallow in pitiful volumes. Time to take some risks

BUSINESS INSIDER: Tell us about your career history?

TRADER: I’ve been in the business 3 years. a little over a year doing research, and have been an international equities trader for a year and a half. Traded Europe for a year, then switched to Asia.

BUSINESS INSIDER: So why isn’t business good? Isn’t Asia still kind of hot?

TRADER: Once the foreign investors realised that with EU and US slowing down there would be less demand for exports, Asia started getting crunched. The surprising thing was the correlation between developed, emerging and frontier Asia. Korea, Japan, Philippines, Vietnam, they would all trade down on bad econ data from US and Europe, no more safe EM havens.

BUSINESS INSIDER: So what’s your job actually like?

TRADER: A lot of it is client servicing at this point, most of the orders are sell orders limit-away, you’re just babysitting them… now I get excited when the phone rings.

BUSINESS INSIDER: And that’s a major difference from before?

TRADER: Used to be speaking on two phones and dozens of IB chats all at once during the selloff in Europe last summer… not a lot of buyside firms have traders or PMs live for Asia, and the ones that do aren’t doing much, sitting on cash and safe positions.

BUSINESS INSIDER: But you trade equity. Are other asset classes seeing more action?

TRADER: I know there is some activity in Asian gov debt. the yields on Vietnamese, Indonesian, etc. are very attractive, they may not be bored, but they certainly aren’t too busy, those are thin markets relatively speaking, not the kind of excitement I seek.

BUSINESS INSIDER: Why not ride it out for business to improve again?

TRADER: I’m an optimistic person, but its going to be a while. The problems in Europe will drag on for years. even when things get better, I’m not confident that they will get good enough that I will be able to reach my full potential. there is still so much more contraction yet to happen in the financial industry, so much more regulation to come, when volume comes back, it wont be for a while. And since my expertise is in emerging and frontier markets, a few years ago my firm was one of the first ones to get into all of these markets, but now we have lost the advantage. take sri Lanka for example. Our firm made a big mark by being first in there, and it paid! but now it is over-brokered, so many other firms have popped up to take away business. Plus Sri Lanka is now doing about 1/20th the avg daily volume it did in 2007-2008. Plus all of the buy side firms have been slashing commission rates, and I don’t see those going back up. When vol comes back, still never going to be as profitable as it once was, more competition, lower comm rates.

BUSINESS INSIDER: Why aren’t the frontier markets as hot as they previously were?

TRADER: It was the initial boom of a new fast growing frontier market, but once the buyside bought the positions they wanted, not much else to do. But that is really just sri Lanka, but you see similar themes elsewhere.

BUSINESS INSIDER: So tell us, what was your greatest memory from being a trader?

TRADER: Trading Europe last July, the big austerity vote in Greece. After the parliament passed the law, we still had another 90 minutes of trading I remember that I had a big piece on one order left going into the closing auction in Switzerland, I was so nervous about getting a fill I broke a piece of a molar off clenching my jaw as I waited to see if I would get filled at my limit. and I did! best moment by far. Compared to volume around that time, it was big, 2-3x. But it seems bigger now since avg volume is so much lower than even last year.

BUSINESS INSIDER: Thanks, and good luck!

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