These days, the former head of currency trading for Prudential Securities Inc. swaps jokes about the market with his wife, Lucille, who trades alongside him. Mr. Cudzil runs a new branch office of On-Site Trading Inc. in the small town of Red Bank, New Jersey, a short drive away from his home, spending his workdays buying and selling stocks and recruiting and training traders.
Nearly a year after resigning from Prudential, Mr. Cudzil remains convinced he made the right move. The weak market has made it difficult for him to sign up new traders, but he is optimistic about the future and says he has no regrets about leaving Wall Street, particularly when he recalls the long hours he used to log. "I'm very happy with the switch," he says.
Tough Times in Day Trading
For now, Mr. Cudzil's trading floor remains mostly empty. He has 28 trading stations set up and could soon add another 12 if needed. But recently he had only nine traders working, including himself and his wife, plus another three that are training. "I'm a little disappointed," he says.
Mr. Cudzil is trying to break into the day-trading business at a tough time. The boom in technology stocks fueled interest in day traders, the individuals who trade in and out of stocks many times over the course of a single day and typically don't hold positions overnight.
But the decline in stock prices has shaken traders. Industry executives such as Gary Mednick, the president of On-Site, Great Neck, N.Y., say experienced traders are still on their feet but acknowledge that the flow of newcomers has been diminished.
Not that Mr. Cudzil isn't trying. With some help from On-Site, he has run television advertisements, then spent time diligently answering questions from prospective traders. Mr. Cudzil is putting his money where his mouth is: Opening the branch office cost him more than $500,000 in start-up costs, he says, plus monthly expenses that include rent payments of more than $5,000.
And while some trading rooms are relatively spartan, Mr. Cudzil has equipped his office with an exercise machine, expensive chairs and a high-end coffee maker.
The business isn't profitable yet, Mr. Cudzil says, but he hopes that more New Jersey traders will show up, having grown sick of commuting to New York, once word of his office gets out. Red Bank is not a metropolis, but it can be very appealing in the summertime.
In the meantime, there is always the market. Although his responsibilities as branch manager keep him occupied during part of the day, Mr. Cudzil always is searching for a good trade.
On a day in late May, his instincts led him to Juniper Networks Inc., a technology stock that Mr. Cudzil believed was ready to fall in the "premarket" period that precedes the traditional 9:30 a.m. opening bell.
The hunch paid off, and soon Mr. Cudzil's account was "in the green," or profitable, thanks to some "short" trades in Juniper, Mountain View, Calif. "I love that stock," he says later. In a short sale, an investor sells borrowed stock, hoping to make a profit by buying an equal number of shares later at a lower price to replace the borrowed stock.
Mr. Cudzil won't say how much money he has made trading since the On-Site branch opened its doors in December, but says that each day he tries to keep his losses under $5,000 and aims to make $5,000. Mr. Cudzil says he is an active trader -- he makes 40 to 60 trades a day -- and one that doesn't hold stocks for too long.
But his style isn't the rapid-fire cadence embraced by more frantic day traders. Instead, he often makes his decisions on what to buy and sell using stock-analysis software, complemented by tips and insight he picks up from other traders and from the Internet.
'A Trader at Heart'
For Mr. Cudzil, switching from currencies to stocks required some adjustments -- he had to get used to the restrictions on selling a stock short, and he is less than thrilled with the trading habits of professional stock dealers -- but he says his prior professional experience has helped him tremendously. "I'm a trader at heart," he says.
And it runs in the family: His three sons from a previous marriage all work in trading. Mr. Cudzil's former boss at Prudential, Hardwick Simmons, says Mr. Cudzil's trading-and-management styles should adapt well to the world of stocks. "Even though the medium is different, the basic skills are the same," says Mr. Simmons, the chief executive of the Nasdaq Stock Market.
It is those skills that Mr. Cudzil is trying to promote. He wants his traders to succeed, in no small part because he keeps part of the commissions they pay to On-Site, and a trader who consistently loses money is unlikely to keep trading for a very long time.
But on this particular day, the other On-Site traders haven't been able to emulate him as a sagging stock market leaves them in the red. Emotions run high at times. "I'm like a yo-yo today," says Lucille Cudzil. "Up and down."
Like her husband, Ms. Cudzil also once worked in foreign exchange, as a broker. Now, she cracks jokes about their differing views on the market (she considers herself a bull, pointing to her status as a Taurus, while he's more bearish) even as she bemoans the time he spends studying stocks at home. Her husband, meanwhile, is appreciative of her skills: "She has no fear," he says. "Scared traders never make money."
The other traders seem to appreciate Mr. Cudzil's advice. Michael Manela, a 24-year-old who studied accounting in college and who had some trading experience before joining On-Site, says Mr. Cudzil has helped him learn to make better decisions, like knowing when to cut his losses. "It's the hardest thing, to get out when you're down," Mr. Manela says.
Shaky Stock Market
For now, the branch is taking up a lot of Mr. Cudzil's time, although he would eventually like to hire an assistant manager. Looking back, he realizes that the office's late 2000 debut didn't have the best timing. "Around the holidays, the markets are dead," he says.
More recently, the shaky stock market has made it difficult to attract the skilled traders that he wants. "Traders are very fickle people," he says. "They hate change."
On-Site's Mr. Mednick says Mr. Cudzil's efforts should receive a boost from the planned installation of additional trading software in Red Bank that is expected to lure traders used to different systems.
By late afternoon, things don't look much different than in the morning. There are several numbers colored red on the screen that Mr. Cudzil uses to track the traders' performance. Ms. Cudzil finishes with an $11,070 loss, net of estimated commissions, including $4,450 in losses on two stocks that she is holding for the longer term. "This was one of my worst days in a while," she says.
Mr. Cudzil, meanwhile, has $1,672 in profits around 5:50 p.m., mostly on the strength of those early-morning Juniper trades. But he still has a short position that he needs to wrap up.
In a subsequent interview, Mr. Cudzil says he took care of this at around 6:30 p.m. and that his final tally didn't change very much.
Although he had a better day than many other traders did, the daily grind of the market still got to him. At day's end, "I just wanted to go home."