bond traders at MS
http://online.wsj.com/article/SB10000872396390443…
Are all or most traders eventually going to be replaced with programmers?
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At Morgan Stanley they're referred to as brogrammers.
This makes me sad.
Yup. Very few opportunities in trading unless you're a programmer. Either learn that skillset or leave the industry altogether.
What language are most of these programmers using?
C++, C#, java, although python is becoming more widely used at prop shops. Also major banks have their own proprietary languages as well; goldman uses a language called slang, for instance.
Speaking as someone who works in HFT , I think the industry has very limited scope. Most corporate bonds are too illiquid to trade well electronically.
I agree with this. I think HFT will be tough to implement in corporate bonds, exotic derivatives, and OTC instruments in general. It has completely taken over the equity market, and margins for HFT shops have decreased significantly in the last 2 years.
As expected. It's an industry that has almost no barrier to entry in terms of infrastructure/capital base. Therefore , one would expect margins to be squeezed down , and then an eventual consolidation where bigger players eat up smaller ones. That's exactly what's happening. My shop has been poaching people left and right.
I think MS is just hoping it becomes more elecontric based. Their fixed income business has been getting crushed and they need a way to increase margins and profits
"Morgan Stanley's head of interest-rate trading, Glenn Hadden, has told colleagues in recent months and that the trading floor of the future will surround a few traders with the hum of powerful machines."
That's like Jules Veme saying "We shall one day travel to the moon" back in 1865. It will happen for sure, but probably not in our life time or least while we're still in the trading floor. As folks mentioned above exotics and OTC are too illquid to be traded by machines today
They're also too complex. Computerized algorithms/HFT models all focus on a sort of relative value type trading, or on MMing. The MMing depends very heavily on good flow going both ways. The Relative value depends on constant feedback from different exchanges/asset classes millisecond by millisecond. Hell, even vanilla fixed income/commodity options aren't moving from the pit to algo trading.
Quant trading is much more about extracting very marginal statistical edges than about any sort of bonafide risk taking
Dude if any of you actually transacted in fixed income markets you would know that we are many many years away from the market being completely electronic. These guys are just scrambling because none of them have made any money recently and the authorities are trying to make it more difficult for broker/dealers to take risk. But believe me when I tell you that there are plenty of opportunities in trading for non-programmers...in fact many more opportunities then there are for people who have programming skills but no discretionary market experience.
And BTW I graduated in 2002 and people then told me that sales and trading was dead and we would all be replaced by computers in the near future...the last decade has been the most profitable one for traders in history. So be careful about doomsday predictions...thank god i didnt listen to that crowd.
Nearly all the posts in this thread so far actually agree with you. Only OTR Treasuries/CME Treasury futs, Bund/Bobl/Schatz and Eurodollars/EURIBOR have any Algo trading presence.
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