Silent.Trader said:
It doesn't sound that ridiculous to me as you make it sound fxmarkets. All depends off course on the trading style. But assuming that they don't want to much a marketexposure and trade roughly market neutral it does make sense. If sectors are mixed there's a fair change that all traders are short the same sector and long the same sector. By trading by sector they'll not only be market neutral over the entiremarket, but also per sector as every trader will stay roughly market neutral. I think that should reduce volatility (read risk) significantly.
grtnx
Wilco
hello Wilco.
Hmm now my knowledge of Banks trading is zero, so how could I comment? well just because your in a bank doesn't mean you are gonna make money.. you may be restricted.......?reading from the article I assumed these banks were engaged in speculative trading enabled by Opportunity to take advantage of volatility/risk and the article came across as these banks (traders who work in the bank) fell flat on their faces when opportunity to profit is favourable as I see it.
Is it speculative trading that banks are engaged in ? or something else which isn't trading as I perhaps label it.
Totally agree on the Know your onions aspect of it, that I assume is a very basic to the point that its a non starter in the equation. I would assume that the resources the banks have at their disposal they would be able to attract traders (for a while) who would know at what price it their product traded at 3 mins ago, 3 hours ago and 3 days ago.
Is it different in banks I mean if a traders long and his product that s/he is trading is not longing anymore
a) why havent they closed the long
b) why are they not looking for shorts
c) why did they lose so much money.
It reminds me of the fund managers who are experts at growth trusts unit trusts etc... whats going wrong... I understand that these managers often need to be invested or takes time to decide on what to do... but speculative traders taking advantage of price volatility ,hmm thats the point isn't it... ?? speed of action in that brief period of time is your friend not an excuse is it ?
open for learning here. Is it the size of money they need to shift which causes problems?
fx