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Are Traders Worth Their Money?

Listener Peter Stock sent an interesting question after hearing us talk a lot over the last few weeks with Will Aston-Reese and his colleagues at Tradition Asiel Securities.

I'd like to understand how these people are paid (how well that is), how complicated and mentally taxing their bank matching tasks really are and why their whole operation hasn't been automated yet?

I sent the note to Will and he quickly responded:

It's not an unusual question.

A) Automation: Believe it or not, we move faster than automation...to buy via Trade Web [an automatic, computerized trading platform], for example, requires inputting the request, waiting for responses, accepting an offer and then waiting for confirmation. Also, some segments of our market trade right up until the last second. What happens if your computer freezes.

B) Physical/Mental: has the listener ever simultaneously listened, talked and read for 10-12 hours a day 5 days a week?

C) How we are paid. my initial response is that we are paid via Nunyagoddambusiness National Bank. But, there is common misconception about Wall Street people. Most of us are not millionaires, let alone gazillionaires. We have car payments, mortgages, kids in college etc etc etc.

Hope that helps...

It does help.

For what it's worth, I've been to Tradition Asiel's trading room a bunch of times and these guys are working really, really hard. I used to have some vague vision of Wall Street brokers as either big shots in fancy suits at big oak desks or as crazy, coked-up maniacs screaming across a trading floor.

Either way, I didn't think they had too many day-to-day worries other than grabbing another few million. And I thought I was far more intellectually stimulated in my life.

I don't think that's true anymore. These guys have to be really smart and intellectually agile to monitor and react to this absurdly fast moving market. The ones who are there just for greed, alone, and don't bring intellectual muscle get weeded out quickly.