No volatility……..no problem. Too many passive index investors……no problem. To much high frequency trading…….no problem. No traders………..THAT’S the problem. Where did they go? Well, the ‘older’ ones are in Florida and the newer ones are in the cryptocurrencies (Bitcoin, Ethereum, etc) since that’s where the action is. Way back when, as Wall Street discovered options (CBOE) and futures (CBOT & CME), they called Chicago traders “cowboys”. So, now here come the “crypto-cowboys”. Still ways to make money out there. Just flow with the times.
“Mike Komaransky spent 16 years trading, starting out as a clerk in the pits of the Chicago Mercantile Exchange, buying and selling everything from U.S. Treasuries to European fixed income derivatives. He spent his career at DRW Holdings, becoming a partner at the proprietary trading firm that runs one of Wall Street’s largest high frequency trading businesses. Since 2010 Komaransky has focused on a new asset class, trading cryptocurrencies like bitcoin, and he did so well that Komaransky retired this summer—at the age of 38.
“After 16 years of trading, today is my last day,” Komaransky tweeted on the last day of June. “I wish you the best.”
Komaransky has moved to France. His twitter feed shows him standing next to a pool and holding a surf board that has bitcoin emblems on it. Komaransky won’t comment on how much money he made trading bitcoin, but he clearly earned a fortune. “He has moved to France with his family,” says Bobby Cho, who now runs the cryptocurrency trading business Komaransky founded at DRW in 2014. “I don’t want to get into the finer details but you can anticipate that anyone who was interested in the technology in 2010 and had a trading background probably made some plays.”
For years, proprietary trading firms were booming, minting fortunes that were fueled by high frequency trading. The crowd that revolutionized Wall Street trading became the subject of fascination (appearing on the cover of Forbes in 2009 as “The New Masters of Wall Street”) and derision (cast as the bad guys in Michael Lewis’ bestselling book “Flash Boys”).
But with markets in a long period of record-low volatility, high frequency trading is no longer sizzling and some firms are struggling…”
Full Story at Forbes