Friday, November 25, 2005
Stock Loan traders: Just idiots with phones?
Why are these people so objectionable?
Firstly stock loan traders aren't 'traders' at all. This is the misnomer that is the root cause of the problem. They are merely glorified order fillers. No different from serving coffee or fries or doughnuts. Consider the following
I would like a big mac please for 2.99
I would like to borrow 1 share of Vodaphone at 1.20 please.
Spot the difference. No. Well the main difference is that the people serving in fast food joints tend to be politer, brighter and of course you guessed it much more numerate. The number of times the fee/rebate/tax rate is incorrect on stockloan trades, even when the front end systems have fool proof buttons need to be seen to be believed. The question for managers of these morons should be is not how much money are my stock loan traders making me - but how much are they costing me - amongst other things in
Failed trades
Unnecessary over-borrows
Lost tax credit and planning opportunities
Opportunity costs of depot mis-management
As over-paid simple jobs go - it doesn't get any easier. Yet this seems to encourage them to ape the behaviour of their thinking counter-parts, such as structurers or even cash/equity traders. The most objectionable people in this arena tend be the 'Heads' of Stock loan as they they proudly call themselves.Normally ex-UK settlements clerks who found new homes after CREST was introduced so there was nothing for them to do. I look forward to the day when the whole of the stock loan trading is totally automated and we can get rid of these people.
obviously you got turned down for the job!
if you have a chip on your shoulder with regard to the amounts of cash that stock loan traders make for their clients and indeed themselves,it is maybe yourself who should be working in mc donalds as im convinced that your chip is a damn sight bigger than anything you can get in there at present,and im sure they would welcome you with open arms if you think you can get £2.99 for a big mac...so leave the failing hedgefund that you quite clearly work for,and either go back to school or try for your 5 star badge at an outlet near you.
You also have assumed that the people you borrow stock from are the actual beneficial owners - which they seldom are. In a clear-cut situation when borrowing the stock from the owners or their agents, I would agree the they are not traders, they are negotiators.
Are there desks/individuals that act in the way you have described? Certainly. I have worked at investments banks for over twenty years in three different countries, and I would happily give you similar descriptions of people in all parts of the banks. Was everyone that made money in CB arb in the 80's or a couple of years ago, an understated, unassuming genius?
If you've had a bad experience, don't apply it across the board. You must be dealing with odd firms or junior people if you think the business is run by ex UK settlements people. Try to expand your contact base.
If you are just an idiot who can't explain himself without expletives ... try talking about something where you have some expertise. This clearly isn't your area.
obviously didn't get the job. Not happy with out bonuses and wages..tough! jog along like a good boy and try and make a market in the UK names you can spell
For more help try: www.howtobecomeastockloantrader.comwww.mcdonalds.com
Maybe you don't understand the true spreads in the business and the fact that these "Equity Finance Traders" are actually a lot brighter than you'll ever be; and by posting rubbish about how easy can it be to borrow and loan equity really shows everyone that you have no feel for the market and its true value. Maybe somebody will send you guys a 101 stock loan manual.
So pissed off you have to jump in and try and justify your existence.
"Got turned down for the job" - is that all you guys can manage?
Judging by the responses here, seems like you've all been waiting years for an outlet for your loss of self worth!
Grow up and trade some real products? Did you always want to be a stock loan trader?
Fact: 9/10 Hedge Fund order monkeys are glorified PM desk assistants who have zero fundamental abilities / knowledge; and wouldnt know a surface smile or a CFROIC from a belt in the mouth..
Fact: Stk Loan "traders" produce better risk adjusted rtns than 9.9/10 Hedge Fund "dealers" - do u guys understand risk / reward??
Fact: 9.99/10 Hedge Fund dealers would lose to their Stk Loan counterparts in a "Stk Loan v's Hedge Fund, Fight Nite"
So whos the chump??
Run along little boys go do a real mans job..
As pointed out kiddo, we are the fastest growing business in equities. Stick that in you pipe and smoke it.
Those brushes you use to sweep the floors, there's only one fit place for storage, it's also an analogy..of sorts
Do any of us claim to be discovering the cure for cancer or performing brain surgery on a daily basis? No we do not. Instead we come to work every day probably earlier than you might even be picking up your sweet little head from your pillow and we work in order to make sure people like you are supplied with the best rebates, stability and information on the liquidity of the securities you desire. Even when you feel you can treat us as second class citizens because apparantly maybe your Mommy told you that "you are the most important person in the whole wide world". We do not go around acting as if we didn't come to work that day the earth just might stop spinning on its axis. Instead the majority of us do our jobs, have a few laughs with colleagues that some consider and treat as close as family and go home feeling pretty good about themselves b/c we know we didn't have to put down random people just to make us feel more like a man. But hey if you have something lacking and this made you feel a lot better, I guess it was a lot cheaper than surgery. Well cityboy88888 best of luck in your career, happy holidays, and despite whatever some woman might have told you, it really is a big deal.
day 1: "lend me $10m X", "ok done, borrow fee 20bps"
day 2: (news out on X) "sorry mate i am changing your fee to 200bps on your borrow today" WTF??!
yet these idiots still manage to lose money: failing trades, overborrows, corporate actions despite its simple status
as someone who has had the pleasure of having to deal with these simpletons, i can vouch most have massive chips on their shoulders of not being "back office"
in reality its just ops guys trying to act big: dim, (usually fat) ex-settlement clerks scraping enough cash for a 2nd hand 911!! you are pretend traders guys! why do you think most hedge funds classify equity finance as a loss making back office role?! go figure
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