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Prop traders feel the heat

The jobs market for proprietary traders at the moment is about as volatile as the share market they are working in from day to day.

In the light of investment banks such as Citigroup having made several prop traders redundant, and UBS having racked up large trading losses, experts warn that more job cuts are on the way.

Tim McGowen of Fortitude Capital, who has managed proprietary trading books for some of Australia’s largest institutional investment banks, including ABN AMRO, CS First Boston and UBS Warburg, expects more redundancies to come.

“It’s all a function of the sort of cycle we’re in at the moment. I know that already there’s been a couple of redundancies at Citigroup from the proprietary desk. Then you’d probably have to think from the way this market looks that it’s going to be a trend because of the number of US banks in Australia. There’s going to be some big losses announced from prop desks, you’d assume, in this sort of environment, and that would have to flow through to hirings and redundancies.”

Caan Krsztew-Ivanow, a senior search consultant at Melbourne-based financial services specialist Graeme V. Jones & Associates, notes that proprietary traders are under a lot of pressure to perform internally.

“Now is the time for them to really show what they’re worth because they’re working in a marketplace that’s very volatile,” Krstew Ivanow says.

“If you’re good and you’re making money, then this is a great time to be in the market because you’re going to be headhunted by a lot of firms.

“But proprietary traders are in a Catch 22 situation: if they’re making money they’re going to be well looked after by their company, but that also means there is opportunity for them to be headhunted.”

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