Turning Warriors Into Wall Streeters
Three years ago, Charles Reeder was a Marine machine gunner in Iraq. Now he’s studying to become a floor trader at the New York Stock Exchange.
Booyah.
“I decided I wanted a career on Wall Street when a fellow veteran took me down to the trading floor and showed me how my skills on the battlefield, such as quick strategic thinking in the face of extreme consequences, were applicable in the financial markets,” Reeder said.
It is the moral imperative of the United States and Wall Street to help returning combat veterans. And there is no better place than Wall Street to turn warriors into traders.
That’s the thinking of Jim Cahill, president at Drexel Hamilton, a broker-dealer owned by veterans who were disabled while serving, founded on the principle of offering meaningful employment opportunities to disabled veterans.
It is a mission also supported by NYSE Euronext, which offers combat veterans a 10-week internship/education course designed to help returning warriors transition into financial and corporate service careers in the civilian workforce. The program, now in its second year, is designed exclusively for U.S. military veterans, providing practical, hands-on training, experience and resources.
Call it Operation Enduring Employment.
“We’re going way out of our way to get veterans, either disabled or not, hired and on their way to great careers and the best possible jobs,” Cahill told Traders Magazine. “Wall Street and the financial industry should be bringing these people along.”
While the national unemployment rate is currently at 7.4 percent, the jobless rate for post-Gulf War II veterans is higher, hovering around the 10 percent mark in 2012, according to data from the U.S. Department of Labor. In 2012, the unemployment rate for male Gulf War II-era veterans ages 18 to 24 was 20 percent, higher than the rate for non-veterans of the same age group (16.4 percent).
And it doesn’t matter to Cahill or Drexel if those it trains move on to other firms or stay on. The bottom line, Cahill said, was to get veterans working.
-John D’Antona Jr.
Sun Trading to Acquire Options Market Maker
Sun Holdings, the parent company of Sun Trading, will acquire options market maker Toro Trading.
Sun Trading, a Chicago-based high-speed trading shop with about 100 employees, focuses primarily on cash equities in the U.S., Europe and Asia.
Toro, with nine employees, is a New York-based options market maker. At presstime, the deal was expected to close Aug. 30
The deal is expected to diversify Sun Trading’s expertise and geographic reach, the company said in a statement. Sun will maintain an office in New York and retain Toro’s principals, Danon Robinson, Adam Besch-Turner and Joshua Jackson.
Sun Trading expects its new presence in New York City to “increase our ability to attract even more of the industry’s top trading talent and to continue to grow our firm,” Sun Holdings chief executive Bernard Dan said in the statement.
Sun Trading plans to grow the New York operation, hiring Talha Chaudhry, formerly a senior risk official at MF Global, to recruit trading pros.
The move is Sun Trading’s second attempt at options trading. In 2011, the firm fired about one-third of its staff, including its options trading employees.
– Peter Chapman
New Venues Planned
Two more trading venues are slated to open later this year.
Tripleshot LLC, a Boston-based alternative platform founded by a former executive of dark pool operator Pipeline Trading Systems Inc., and IEX Group Inc., led by Royal Bank of Canada’s former electronic trading chief, plan to start this year, according to Bloomberg News. Both said they have ways to attract longer-term investors and protect them from high-frequency traders.
“It’s certainly an uphill battle for a new venue to gather scale and liquidity,” said Richard Repetto, an analyst at Sandler O’Neill & Partners LP.
While the two new entrants have different structures, they do have common goals – grab market share from the public exchanges and their operators, such as NYSE Euronext, Nasdaq OMX Group Inc. and BATS Global Markets, and provide a place where investors can buy and sell stocks with a minimum of price movement.
-John D’Antona Jr.
Dark Pool Operator OK with New Rules
Keith Ross, chief executive of PDQ ATS, a Chicago-based alternative trading system, recently sat down with Traders Magazine to say he was OK with proposed new rules governing dark pools and initiatives aimed at making them more transparent.
Ross said he was in favor of more transparency, as it would bolster investor confidence in the equity markets, something he felt was needed to boost trading volume.
“[The Financial Industry Regulatory Authority] has proposed each of the ATSs report by issue the amount of stock they trade in a given week,” Ross said. “ATSs will have a week to report their data, and then FINRA needs another week to collate this data and then publish a report. There will be a public record of how much volume of stock is trading in a particular venue.”
He added that it was OK that there would be, at minimum, a one-week delay in releasing dark pool data.
“Any data out there, even if it lags the market, will give people an opportunity to see what is going on in the dark,” Ross said.
As a dark pool operator, Ross said it wouldn’t be difficult to respond to this new requirement from FINRA for more data.
“While I haven’t seen all the details of the FINRA proposal, we should be able to comply easily,” he said. “We already have to report trade data to OATS already, so a lot of things are already in place. Parsing a subset of this data and giving it to FINRA shouldn’t be hard.”
Ross added that there is some concern among the buysiders he’s spoken with about the increased transparency. The chief concern among larger institutions was that their trading or strategies or order intentions can be discerned by the data.
-John D’Antona Jr.
Engmann’s Venture Targets Pros and Small Hedge Funds
Veteran trading and clearing executive Doug Engmann is targeting small hedge funds and professional traders with his new brokerage, SageTrader.
The introducing brokerage was founded late last year in San Francisco and recently expanded into New York. SageTrader sees a sweet spot in unloved hedge funds. These clients typically are being shown the door at numerous bulge bracket firms because they don’t generate enough business. Tim Taylor, a senior advisor with SageTrader, told Traders Magazine. He said the biggest firms only “want the larger end fund with a minimum account value of $5 million to $20 million.”
Taylor added that SageTrader can make money on funds and highly active traders that have between $1 million to $5 million and need risk management tools. “Customer portfolio margining is our specialty,” Taylor added. “We have a proprietary margining system that can monitor risk on a daily basis.”
SageTrader is the operating subsidiary of Sage Brokerage Holdings. The parent company was founded by Engmann, who has been in the brokerage and trading industry for some 35 years. Last October, he raised $2 million in a Form D filing, according to Securities and Exchange Commission documents.
Engmann co-founded Sage Clearing Corp. in 1982 to service the needs of options market makers. In 1997, he became the chief executive of ABN AMRO’s global professional trading and clearing operations after the Dutch bank acquired Sage. In 2004, Engmann left ABN AMRO when it sold the clearing unit to Merrill Lynch.
From 2005, Engmann spent three years as head of North American equities at clearer Fimat (later Newedge USA) when that clearer purchased the Preferred Trade brokerage from Engmann and his brother.
During his tenure at Fimat, Engmann introduced portfolio margining to the U.S., according to SageTrader officials.
SageTrader is offering the proprietary Sage System reporting, clearing, margin and risk software which had been used by Sage Clearing’s options market maker and Fimat/Newedge portfolio margin customers.
-Peter Chapman
(c) 2013 Traders Magazine and SourceMedia, Inc. All Rights Reserved.
http://www.tradersmagazine.com http://www.sourcemedia.com
