I nternational traders like to say that they're never active in every market every day. If they were, Christopher A. Luft would never get any rest.
Luft is the head equity trader at Marvin & Palmer Associates, a Wilmington, Del. investment manager handling $8.4 billion in assets for pension funds, unions and partnerships. The firm actively invests in international equities, concentrating on Asian and European issues.
Luft has a 14-hour trading day, which can begin as early as 3 a.m., and end as late as 2:30 a.m. (All times are Eastern Standard Time.)
"When I started, I thought I would get tired of this," Luft said. "I haven't. I do have long days, but I can deal with four or five hours of sleep a night."
When Luft is covering European markets, he typically gets up at 3 a.m. to call brokers in London and start working orders from his office at home. Marvin & Palmer equipped Luft's home with a quotation system and a link to the firm's order-management system.
He leaves home less than four hours later to arrive at work by 7 a.m. Luft said volume in Europe surges around 7 a.m. as U.S. investors get into their offices and get involved in the European markets.
He deals mostly with brokers in London, and works with about 30 European brokers during the year.
Luft likes to use capital commitments to complete large trades, hoping to have an order executed quickly with little market impact. But Luft said European brokers, like their colleagues in the U.S., are committing less capital for trades.
"European exchanges are modeling themselves more on U.S. markets and increasing transparency," Luft said. "That cuts down on the ability to put up large prints with capital commitments, because it then has major market impact."
From 7 a.m. to 9 a.m., Luft fields calls from New York brokers for U.S. orders as he continues to work orders in Europe.
His trading partner, Keith Gallagher, covers Asian trading when Luft is working European orders. The two alternate eight-week shifts covering either Asia or Europe. With Luft covering Europe, Gallagher comes into the office by 9 a.m., although he could be up until 2:30 a.m. trading Asian stocks.
After 9 a.m. – while Luft is still working orders in Europe – he and Gallagher handle orders in the U.S. and Latin America. Although four Marvin & Palmer equity managers concentrate solely on Asian and European stocks, three equity managers have holdings in the U.S. and Latin America.
With the close of most European markets around 11 a.m., Luft and Gallagher spend the rest of the day following the markets in the U.S. and Latin America. "If we're not trading, we follow the news and try to communicate with the portfolio managers," Luft added.
After markets in the U.S. and Latin America close, Luft and Gallagher receive the majority of their Asian and European orders for the next day.
With most of his orders already planned out, Luft can head home around 5 p.m.
If Gallagher has a lot of Asian orders to work, he may stay at the office. But most days, he leaves the office at 5 p.m. as well, and trades from his office at home.
Luft said the Asian markets are usually busy from 8 p.m. to 10 p.m., but slow down after 10 p.m. "In Asia, they all have to have lunch, and the markets virtually shut down," he said. Asian markets get busy again at 11:30 p.m., and close around 2:30 a.m.
Luft and Gallagher work with only 12 brokers in Asia – all from major firms. Luft said most U.S. firms trade with Asia through New York brokers.
"In Asia, brokers and managers just want a nice VWAP [volume-weighted average price] kind of trade," he added. "When U.S. managers don't trade actively in Asia, they just go with a VWAP order through a New York broker. We're an active momentum manager. We can't do that."
Luft has been trading at Marvin & Palmer since 1991, and running the desk since 1994. Before joining the firm, he traded on the sellside at the Bank of Delaware in Wilmington for six years.
"It was sink or swim when I started here," he said. "I'd never done any international trading. I was learning on an exponential scale. The curve has leveled off, but I'm still learning."
Gallagher's trading background has helped Luft on the desk. Hired in 1996, Gallagher had three years of international-trading experience at Mitchell Hutchins Asset Management and Fiduciary Trust Company in New York.
With Gallagher on board, Luft has more time for his wife Mary, and their six-year-old son and four-year-old daughter. But he's never able to fully shake his trading schedule, even on weekends.
"I can deal with less sleep, but on weekends I have a tough adjustment to regular hours," Luft said. "I find myself waking up in the middle of the night."
