It has been a good year for anyone engaged in programme trading. But recruiters warn of disturbances to come, particularly for people selling electronic trading products.
David Korn, managing partner for Europe at executive search firm Options Group, says bonuses in portfolio trading should rise between 15% and 20% this year. "It has been a very profitable year again within the programme trading world. Banks have built on last year's success, and it's a product that all clients have come to expect."
Profitability and higher bonuses have been driven by a trend for combining the programme trading business with related electronic execution products, such as algorithmic trading, connectivity and direct market access, says Korn: "We've seen a convergence of products within the portfolio trading umbrella which has lead to higher desk revenues and a push to hire candidates with a cross product skill set."
Recruiters say banks that have hired for European programme trading desks in the past twelve months include Credit Suisse First Boston, Merrill Lynch and ABN Amro. Others, such as Morgan Stanley and Lehman Brothers have lost staff.
Further recruitment is expected next year, with a focus on sales. Mark Horlock, a consultant at recruitment firm Alexander Mann, says banks are already gearing up to add salespeople to promote their programme trading capabilities.
However, new hires will need to work across all electronic execution product areas: "There used to be separate people selling programme trading, direct market access, algorithmic trading and transaction cost analysis," says Horlock. "In future, the sale of all products will be integrated in a single person."
If that's the case, job losses seem inevitable. But recruiters are wary of forecasting redundancies. "It not about cutting, more about upgrading," says Horlock.
Alongside salespeople, Horlock predicts banks will look to add quantitatively focused risk specialists to their programme trading teams. "Risk trades have become increasingly popular over the last 12 months," he says. "Virtually every portfolio desk has added risk traders to their team, and this is likely to continue."