Technology is transforming the industry including buy- and sell-side relationships. On the buy-side, ongoing market fragmentation in trading is forcing a continuous optimisation of sell-side relationships to reach all relevant liquidity pools available and guarantee best execution for their clients. This development is leading to more electronic interaction between buy-side counterparties, which requires the sell-side toward greater specialisation in order to deliver value. Also, AI will enhance this trend and the changes coming could be quite significant or even paradigm shifting.

How can you maintain relationships in a tech driven world to promote transparency, collaboration and market resilience?

Maintaining personal relationships is essential in a tech driven world both to establish a bond of trust with a client and grow that relationship. Real-time responsiveness, 24 hours a day, is most important. And tech tools enable that. But they also promote transparency which is key to trust building. For example, high quality TCA solutions enable the systematic review of the quality of trade executions, and that promotes a continuous conversation/discussion with sell-side counterparties to optimise execution outcomes.

Ideally, tech-driven solutions should also help to optimise and simplify workflows and create a systematic approach that benefits counterparties and achieves the best possible execution outcome.

What sort of technologies are needed/exist to mutually benefit buy- and sell-side participants?

There are a number of useful tools available today. For example: Block-Crossing Network (BCNs) helps connect different counterparts and achieve the best possible price and at the same time minimise overall market impact; improved FIX versions help to exchange as much useful information as possible between different market participants; TCA solutions help achieve trade transparency, best execution controls, and at same time enable, continuous learning from the data created and improve the trading processes.

Technology enables trust building by promoting instant connectivity and transparency. Today, more data is available for all sides to analyse, discuss and optimise execution outcomes.

How do you pick and choose the right tech for your desk?

Our view is that the best way to pick and choose technology is to build it yourself – it ensures that it is built to your exact specifications, as we have done over the years with our own global OMS Bedrock. With the advent of AI that should be more easily done in the future but most firms don’t have that ability now and need to rely on traditional vendors. Engaging with software providers and keeping abreast of new modalities as well as getting client feedback on best in class trading technology is the way to gain knowledge to consider new trading software.

Does increased technology mean the buy-side relies on the traditional sell-side less?

Already electronic execution and direct market access has reduced the reliance on sales traders to source liquidity. AI will likely cause an increase in the use of sophisticated technology where trader’s jobs are supplemented by machines and trades will simply be monitored by human traders. The reliance of traders as we know is likely to reduce over time as one trader will be able to efficiently handle a large number of transactions.

What is the ideal structure for a trading team in today’s world?

A trading team needs to be cohesive across time zones and work together and not have a siloed approach. This is paramount. The global team increasingly needs to work 24 hours as exchanges are likely to be open for longer hours – there is a possibility for exchanges to open 7 days a week!

Although hours of trading per week will likely increase, as trading tools improve, trading decisions can be made by rules-based programs, leading to reduced number of traders involved. Having said that, human traders will still be needed although their focus will be titled towards monitoring.

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State Street said the first phase of the integration was completed ahead of schedule, after the custodian was awarded with a middle-office mandate at the end of 2023. The second and final phase of the migration is targeted for completion in Q1 2026.

“We are excited to partner with State Street on their Alpha platform,” said, Young Lee, chief operating officer from Harris | Oakmark. “We have been very pleased with the progress made during the first phase of the migration as the platform will allow us to operate in a highly efficient operating environment and continue to provide exceptional services to our clients.”

State Street’s Alpha proposition has gone from strength to strength in recent months. During the firm’s third quarter earnings call, chief executive Ron O’Hanley spoke of the competitive advantage that it gives the firm.

“For years now, we’ve talked about the strategy and why we think it’s important and why we think it gives us a competitive advantage,” he said. “One of the reasons is just that. It’s the opportunity to deepen relationships. And the other reason why it’s so important is the flip side of taking long to install is that the business tends to be quite sticky because it’s much more analogous to enterprise outsourcing.”

“Harris | Oakmark marks another significant milestone for our Alpha business broadly,” says John Plansky, head of State Street Alpha. “Providing middle office services to more than 2,000 of their private wealth and retail SMA accounts allows us to deepen our relationship with Harris | Oakmark and further showcase our data capabilities for wealth managers.”

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Named BestXecutor, the new tool offers FX Connect clients actionable pre-trade analytics to optimise request-for-stream and algo execution, embedded into a client’s FX Connect workflow and integrated with its GlobalLink Digital platform.

According to State Street, BestXecutor is designed to help clients quickly evaluate every deal versus BestX TCA factors.

Other benefits of the tool include streamlined pre-trade decision making, workflow integration, and BestX analytics.

BestX consumes and stores over one billion price updates per day. Clients will be able to benefit from accurate TCA that is underpinned by comprehensive, representative and independent market data sources.

BestXecutor also offers flexible counterparty set-up and versatile application.

“Tap into our BestXecutor tool that works effectively for both Algo and RFQ trading, providing a comprehensive solution for buy-side traders. BestXecutor is designed to reduce your execution costs regardless of whether you trade RFQ/risk transfer or algo,” the firm said.

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We very much work as one team. Traders often need to cover their colleagues’ books, so we also emphasise and nurture trust and confidence in each other. 

As a team, we cultivate and nurture a lively and open environment which encourages everyone to share their views and challenge ideas. Diversity of thoughts goes beyond gender, age and nationality, which are seen across our trading desks. Different perspectives tend to lead to different views and ideas. Together with the different time frames and trading styles our traders have, we can diversify our revenues as opposed to having all the traders agreeing on everything and having the exact same type of risk profile.

Are the skillsets that make for a good trader evolving? 

Yes, as the markets become more automated some programming skills are becoming increasingly important. This may range from improving trading analytics and pricing systems to writing fully automated trading systems.

Having said that, traditional skills are still imperative. For example, traders must be able to form a view and analyse what a market is pricing in, and be able to make rational decisions under pressure and within short timeframes.

In short, the sweet spot is a balanced mix of the old and new skills.

What has  been the main topic of conversation amongst you and your traders over the last six months?

We are constantly assessing what is currently driving markets and what might drive them in the immediate future. The policy stance of the Federal Reserve and how that might change is always upmost in our minds. Then of course the policy decisions of all the other central banks but US policy really is the main driver especially around turning points in the economy like we are currently seeing. 

In currencies, the performance of the carry trade has also been discussed as it’s been a major driver in terms of outperformance and more recently underperformance of high yielding currencies versus the Yen.

Looking at the rest of 2024, what market structure changes are you most conscious of?

I’m most conscious of the fact that at the start of the year the Federal Reserve were expected to cut rates ahead of a potential US slowdown and this was very supportive for risk. For good reasons, these cuts have not materialised in 2024. As we start to see the economy slow thoughts turn to the Fed being behind the curve and having to ease more aggressively.

The change in backdrop is less supportive of risk and is going to increase volatility in rates and FX. This in turn will lead to less liquid markets, which will also create its own challenges.

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Citi named Jamie Miller head of electronic equity sales trading for the EMEA region. Based in London, Miller was appointed to head up the division in EMEA after eight and a half years with the bank, specialising in equity sales trading, according to an update on his social media. Miller originally joined Citi after serving for two internships in the bank’s markets division in 2013 and 2014. He joined as a permanent fixture in 2016 as a graduate analyst in the markets division and later moved into equity sales trading in 2018. He has subsequently continued to rise through the ranks, landing his first vice president role in 2021.

State Street appointed Tomas Truzzi as chief executive of State Street Brazil, replacing Telly Theodoropoulos, who led operations in the country since its foundation in 2019.In the role, Truzzi will be responsible for overseeing all strategic initiatives and operations within the country, with a view to promoting growth within one of Latin America’s key markets. Truzzi joined State Street Brazil as head of FX trading. In his previous role, he oversaw the foreign exchange market making desk and managed Banco Commercial’s local treasury function. Prior to joining State Street, Truzzi worked for Standard Chartered in Brazil as head of trading, responsible for reorganising its local fixed income, foreign exchange, and derivatives businesses. Before that, he served in several roles at Morgan Stanley throughout a 13-year term and managed trading desks in Sao Paulo, New York, and London, with a focus on FX, fixed income, and derivatives. 

NatWest appointed Imogen Bachra to lead its global desk strategy team, taking on the role of head of economics and markets strategy. She is set to provide a data-driven approach, providing views on key macroeconomic and market themes across various regions and asset classes. As part of her new role, Bachra will join the trading and sales management team and report to Simon Manwaring. Bachra joined the bank in 2014 and most recently led the UK rates strategy and non-dollar rates strategy. Prior to NatWest, she held positions at Credit Suisse, HSBC, and Royal Bank of Scotland. 

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In the role, Truzzi will be responsible for overseeing all strategic initiatives and operations within the country, with a view to promoting growth within one of Latin America’s key markets. 

“We are pleased to announce the appointment of Tomas as CEO of State Street Brazil, recognising his dedication and contributions,” said Chris Pizzotti, global head of FX voice trading. “For several years he has been instrumental in our expansion in Brazil and has helped position State Street to be among the top 12 local banks in FX. His extensive industry knowledge and experience has helped drive growth and I am confident that under his leadership, State Street Brazil will continue to deliver for our clients and advance our strategic plans more broadly in Latin America.”  

Truzzi joined State Street Brazil in 2019 as head of FX trading. In his previous role, he oversaw the foreign exchange market making desk and managed Banco Commercial’s local treasury function. 

Prior to joining State Street, Truzzi worked for Standard Chartered in Brazil as head of trading, responsible for reorganising its local fixed income, foreign exchange, and derivatives businesses. Before that, he served in several roles at Morgan Stanley throughout a 13-year term and managed trading desks in Sao Paulo, New York, and London, with a focus on FX, fixed income, and derivatives. 

As CEO, Truzzi will report to both Chris Pizzotti, global head of FX voice trading and to Marcia Rothschild, head of Latin America and the Caribbean. 

“I would like to thank Telly for his outstanding work and for building a strong culture that Tomas will certainly carry forward, and for creating a strong foundation for State Street Brazil to continue to build on in the years to come,” said Rothschild.  

Theodoropoulos is returning to the firm’s headquarters in Boston, for a new role where he will focus on the global integration and expansion of CF Global Trading. 

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She takes up her new role after spending the last three years with State Street in several roles including as country head for Switzerland, working for its depository bank business in Germany, and overseeing the investment services business for the Netherlands, Austria and the Nordics. Prior to joining State Street in 2021, she previously served for more than 17 years at UBS across Zurich, London and Singapore and at Credit Suisse.

Start-up hedge fund Jain Global appointed a former Credit Suisse vice president and electronic sales trader to join its ranks on the trading desk ahead of its launch. Emily Facchina Fluet joined Jain as a trader working in London under head of EMEA trading, Jeremy Wyatt.

Fluet takes up her new role after serving at Credit Suisse for the last five and a half years, originally joining the bank in 2018 as an analyst. She later worked her way through the ranks in various electronic sales trading roles, landing her most recent vice president role covering advanced execution services (AES), algorithmic and direct market access (DMA) trading for the Asia Pacific markets in January last year. Fluet parted ways with Credit Suisse in November last year.

LSEG’s Continental European clearing house LCH SA appointed Marcus Robinson head of CDSClear and head of DigitalAssetClear. The move follows the departure of Frank Soussan, who previously served as global head of CDSClear and head of SA EquityClear and CommodityClear. Robinson – who previously served as head of strategy for LSEG Post Trade – will lead CDSClear as it enters the next phase of its international expansion, namely across the US, building upon the launch of client clearing to US firms in February.

Elsewhere in his tenure at LSEG, Robinson previously served as head of Asia Pacific for LCH. Before that, he was chief operating officer and director of business change at SwapClear. Prior to joining LCH, Robinson held roles within JP Morgan’s investment banking and asset management divisions and the Commonwealth Bank of Australia’s financial markets division.

Panmure Liberum expanded its US business with three new appointments to coincide with the newly combined business’ growth plans. Ed Husband and Hugo Hewitt joined the firm’s US sales team in New York and London, respectively.

Elsewhere, Arthur Pyott joined the firm’s sales trading desk and will split his time between New York and Florida. All three additions join from the former Numis US business. According to the firm, the hires add scale to Panmure Liberum’s coverage, enhancing its execution capabilities in the mid and large cap space, and allowing for more support of its clients’ growth ambitions.

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Dagmar Kamber Borens has been appointed head of global markets for the region for State Street Bank International (SSBI).

In her new role, she will report to Anthony Bisegna, head of State Street Global Markets and Andreas Przewloka, chief executive of State Street Bank International. She will be responsible for global markets strategy in continental Europe.

She takes up her new role after spending the last three years with State Street in several roles including as country head for Switzerland, working for its depository bank business in Germany, and overseeing the investment services business for the Netherlands, Austria and the Nordics.

Prior to joining State Street in 2021, she previously served for more than 17 years at UBS across Zurich, London and Singapore and at Credit Suisse.

“European institutions and investors are facing challenging times and are more than ever seeking partnerships to help them reach their goals,” said Dagmar Kamber Borens in a statement.

“Deepening our client relationships while continuing to drive an innovative approach to developing client solutions is integral to our ability to help European clients continue to meet their growth ambitions in a volatile environment.”

She will retain her role as country head for Switzerland.

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Financial terms of the completed deal were not disclosed.

The acquisition will give State Street access to CF Global’s extensive relationships in the space as a segregated outsourced trading entity. Prior to the acquisition of CF Global, State Street had existing outsourced trading offerings in the Americas, APAC and Middle East. CF Global will extend this remit to the UK and Europe.

Read more – State Street set to acquire outsourced trading firm CF Global

“Outsourced trading enables organisations to access new asset classes, prepare for regulatory shifts and navigate global markets while allowing them to focus on their strategic outcomes on behalf of their clients,” said Dan Morgan, global head of portfolio solutions at State Street in a statement. “The addition of CF Global Trading brings industry-leading expertise that strengthens our current outsourced trading services.

The deal was originally revealed by The TRADE in February 2023 and later confirmed by State Street in the following March.

At the time of the confirmation of the deal, State Street said it will also allow it to offer a complete global trading solution as part of its front-to-back State Street Alpha platform.

Clients can expect greater capabilities in multi-asset class execution, modular-based solutions, and 24-hour global trading following the completion of the deal, State Street said.

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The notion of the ‘ideal trader’ was a key topic across numerous conferences and industry reunions last year, where experts across the buy- and sell-side seemingly agree that the optimum mix is a high performing quant individual with a good grasp of data combined with a sociable attitude. However, coming out on top was the consistent belief that embracing the increasingly technological market is paramount. 

The technical side

“The trader of tomorrow should ideally be able to do coding, data analysis, have the relationship with the sell-side and their own teams internally, as well as be an automation enabler and be able to assess technology,” said Peter Welsby, head of European FICC trading at Manulife Investment Management, speaking at the Fixed Income Leaders Summit Europe in October 2023. 

Where the skillset of traders has continued to evolve, due in large part to an increasingly data-driven market, so too has the notion of subject matter expertise. No longer are traders solely required to arrive, learn and sit still. Constantly educating oneself on ever-evolving processes is paramount. 

“The more modern skills, such as being able to navigate an ever-changing market microstructure or get into the weeds analysing data, are now also essential,” explains Graham Sorrell, managing director and head of EMEA and APAC equity, currency and derivatives trading at State Street Global Advisors. 

“The ideal trader requires a combination of traditional and modern skills. That being said, you cannot underestimate how important it is for a trader to possess some key traits, such as being able to spot that anomaly in a large data set or juggle multiple items at once with an incredibly high degree of accuracy. 

“[…] To run a successful trading team, you require a diverse mix of skills. That blend provides the foundations of an efficient and successful trading team.” 

Heads of desks across the market agree that in this new age, the spectrum, educational backgrounds of candidates has also increasingly widened in order to plug ‘tech’ gaps. 

Historically, the majority of traders have typically been either accounting and finance or economics majors. Today, however, desks are seeking more and more candidates qualified in maths or computer science, as well as a swathe of individuals comfortable coding or learning to code on the job. 

Looking deeper into the empirical skills needed on the desk, Chris Pizzotti, senior managing director, global head of FX voice trading at State Street, says one of the most noticeable differences, compared to 10-15 years ago, is that programming skills are increasingly highly-sought-after – and is something set to be progressively important going forward. 

“As a trader, if you are making markets electronically you need to be able to make adjustments to pricing and spreads as the market adapts to changing conditions. While gaining experience of the macro environment takes time, a junior trader who can program, can make an immediate contribution to the trading desk,” he explains. 

Speaking to The TRADE earlier this year, Dan Burke, managing director and global head of credit e-trading at Standard Chartered, asserted that looking at his trading desk today, every team member is coding in Python, something that he explained “you would not have seen in credit trading even two years ago”. 

“We now have access to so many more data sets and variables that instantly price huge numbers of bonds, so candidates need to be very comfortable with maths and statistics,” he said.  

“Being able to confidently engage with this data and sculpt strategy by writing your own code is now essential, especially now as our competitors are not just traditional banking peers, but newer fintech firms as well. More and more, price formation is happening via smart algos, so our traders are morphing into a combination of programmers and risk managers.” 

Nevertheless, the need for traders to cultivate real-life relationships in order to be successful has not shifted from the fore – although technical skillsets develop, market onlookers agree that being likeable remains something that should be nurtured in tandem. 

“We are a long way from the stage where the only role of the human is to feed the dog that keeps the human from touching the machine,” adds Sorrell. “While so much of what is done today is done electronically, a lot of that is underpinned by broader relationships, which is one of the areas where having good people skills comes to the fore. Navigating through the period of extreme uncertainty and volatility we saw during the Covid pandemic demonstrated that.” 

Thus, despite the clear importance of technological capacity, a successful trader cannot survive on data alone. A plane will fly itself, but there will always be a need for the pilot to land it – especially in times of turbulence. Therefore, market participants agree that a combination of both new skills and the conventional are essential to playing the role of the ‘ideal trader’. 

In other words, what currently equates to a successful trader does not mean the death of the personality hire. Indeed, market volatility has over and over again exacerbated the need for the human side of trading.  

The personal side 

Typically, when hiring someone onto the desk, the easy and go-to answer for decades has boiled down to selecting someone at the top of their game. Central to this concept has been the extrovert and overall ‘people person’ – sociable, likeable and palatable. A winner. However, what being at the top of your game really means empirically has changed. 

While this ability to build external relationships remains an important facet, the market appears to be increasingly valuing what individuals are really like on the inside. 

Self-awareness, emotional health, stability and temperament are all personal aspects to the game also – and it’s when looking inwards that an important, and for a long time overlooked, aspect of being an ‘ideal trader’ comes to the fore. Someone with a strong mental will. 

“You read a lot on people saying some traders need to be unemotional but that’s not the case. Everyone’s got emotions and it’s fine to have emotions, but you need to be aware of them,” says David McAnany, co-head of foreign exchange, EMEA at BNY Mellon. 

“If you’re really, really restricted and you’re feeling negative, that’s fine, but then don’t go putting on a significant amount of risk or putting on a trade. Conversely, if you’re feeling super happy because you’ve made some money maybe it can be easy to be a little bit greedy or a bit bold which could need to be reined in just a little bit.” 

The ups and downs of a traders’ life is well documented, and so it speaks to reason that the ability to cope with these often incredible highs and lows is vital – with the most successful individuals being those with the ability to be mentally consistent. 

“It’s about your ability to control, you’re going to have emotions but to understand how to be able to control the emotion is the key. If you don’t feel something from trading, you’re not going to enjoy it,” explains Jordan Barnett, managing director and global head of custody FX trading and product at BNY Mellon. 

Elsewhere, skillsets aside, what the market continues to value almost number one is drive – a prevailing trait from the 80s floor trader to the new millennium algo specialist. The importance of hunger and the want to develop further has never waned. 

“[It’s] something which you can’t learn at university. It also knows no boundaries in terms of diversity,” adds McAnany. “It’s very psychological. Sometimes your worst enemy is yourself, something a lot of people don’t really think about. It’s important for traders to strive to be the best possible version of oneself in order to succeed. This includes things inside and outside of the office, like diet, exercise, right mental frame of mind.” 

A good headspace is also closely linked to the ability to multi-task. It is a key and often ignored component to being a good fit for trading, Barnett explains. 

“Studies show that multitasking doesn’t always work well. That idea is very ironic because in trading, you absolutely have to multitask, he says. “It is inherent to the job, it’s fundamental that you are able to do, listen and process multiple things at once.” 

Relatedly, a key talking point across the market in recent times has been on enlisting the most well-rounded traders in order to cope with increasing change and the high stakes game being played. 

Speaking at TradeTech FX 2023, Carolina Trujillo, head of e-FX distribution at SEB, made clear how times may be changing, but proactivity is here to stay. 

“Gone are the days where you would come into a position and have a steep learning curve for a few months and then sit comfortably for five years. The young talent definitely wants to be challenged and wants to grow continuously,” she said. 

“[…] We need great specialists, but we also want them to have many complementary skills. We want those people to learn and grow and be much more adaptable and be able to move across different paths.” 

The best of both worlds 

A one size fits all answer to the ‘perfect trader’ adage is an impossible feat. It is clear that where the two sides come together – both the technical and the personal – is the ability and psychological range to grow, coupled with the proactivity to keep up. Accurate self-reflection, followed by action, is the pervasive trait of the successful trader. 

In the end, it’s not about the technical skills with which an individual arrives, nor the personal factors which makes for good connections. Instead, the market overarchingly believes success comes down to one’s willingness to adapt, learn and develop on all levels. 

Speaking to this, Pizzotti says: “While technologies, as always, help humans improve efficiency and productivity, talent remains an important part of any trading desk.” 

In order to be considered ‘ideal’ as a trader it is no longer enough to have just half of the bases covered, especially amidst times of stress. The ideal trader must put in the effort to plug their own gaps and constantly seek improvement, educating oneself on the technical side which will not magically come, as well as investing in oneself to build resilience. 

“The desired skillset has matured, it’s more well-rounded and that’s how we stack the desks, with well-rounded talent,” explains Barnett. 

The consistent quest to optimise your own processes appears to be the overarching key to success, but importantly, this is true for both newcomers and individuals who have spent years in the job. In a changing environment, open-mindedness is the key to longevity. 

In the fast-paced world of trading, there is a reason not everyone cuts the mustard – in another profession it might be fine to take your foot off the pedal occasionally or fall back ever so slightly as the office technology upgrades, but for a trader keeping up is imperative. 

“If you have a really good year trading, it has no bearing on the fact that your next year might not be as good. As a result, traders have to stay ahead of what’s coming at them,” Barnett concludes. 

Amidst an ever-changing market, what it means to be well rounded in this space has enhanced, and the market agrees that if you fall behind, you will stay behind. 

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