No more prop for JP Morgan; what now??

[gnr2206]

http://finance.yahoo.com/news/JPMorgan-Shutting-Commodities-cnbc-1351616167.html?x=0&.v=1

How will JP Morgan compensate for loss of revenue, i thought prop trading was quite profitable?

And what now for the commodities trader??

 

[scose-no-doubt]

Maybe they'll open up a prop subsidiary with their own funds?

 

[Shakone]

Their prop business is only 100 people, and accounts for a whopping 1% of annual revenue. JPMorgan is employing 200,000 people or so, and they want to get rid of these 100 that are pulling in way more than their share compared to the other 200k. It doesn't make much business sense. Obama and his crazy reforms.

 

[Pento]

Only a matter of time until JP and others find ways around these reforms and are able to bring the prop trading back under their umbrella. For the meantime they have to look like they are obeying the rules.

 

[MrGecko]

I don't think it will be the regulatory side of things that causes issues (GS for example are looking at setting their old prop desks as a standalone hedgefund), IMO the interesting bit will be whether the prop traders can emulate their previous performance without all the information that they had access to in the bank.

 

[Martinghoul]

I don't think it will be the regulatory side of things that causes issues (GS for example are looking at setting their old prop desks as a standalone hedgefund), IMO the interesting bit will be whether the prop traders can emulate their previous performance without all the information that they had access to in the bank.

MrG, as usual, hits the nail on the head... That is, in fact, the question.

 

[Pento]

MrG what sort of information do you mean?

If they are spun off then surely they get to keep all the software and algos they have already developed or inherited from the bank.

The analyst reports are available through online portals and even accessible by former employees at some banks.

For other information which comes from other traders, like what trades are going through and whos bid/offered what and where etc, all it takes is a phone call to a friend still working in the bank trading floor. Everyone is happy to share information if you are willing to share some back.

So in that respect I'd imagine they will be able to emulate their previous performance or near enough anyway.

 

[shortsell]

those aren't the types of conversations that can be had by phone...

 

[advfntrader]

I'm sure these guys could make money anywhere, possibly the bank has much faster access to the markets and news though...

 

[arabianights]

I'm sure these guys could make money anywhere

depends