-- =DJ Help Wanted: Equity Traders With Technology Skills
By Anjali Cordeiro
NEW YORK (Dow Jones)--Brian Barry plans
to go back to school this spring. The
32-year-old trader at Piper Jaffray
& Co. (PJC) is shopping around for evening
classes in the computer
programming languages C++ and JAVA.
Barry already has a degree in
finance and about 10 years of trading
experience. But the use of
computer-trading programs is increasing, and he
believes that Wall Street
firms are constantly on the look out for
In particular, algorithms, or software programs that execute
electronically, are playing an increasingly important role.
One survey suggests
about one-quarter of equities trades last year were
from algorithmic programs.
Trading desks, even buy side firms, want new
recruits to quickly master these
and other trading technologies.
"By having a finance degree, rather than a degree in computer
mathematics, you are almost behind the curve," said Barry, who
is a senior
trader in program and algorithmic trading.
Understanding programming languages will help him to provide buy-side
with reports on the execution of their stock trades and to play a
role in the
development of new trading strategies, he said. "It's helpful
if the trader can
access the database and write custom client reports
without having to wait for
help from the IT department."
Street firms are hawking a slew of new trading software to fund
and their trading desks. And traders from these brokerage firms,
or the sell
side, are spending a lot more of their time interacting with
and advising their
clients from money management firms, or the buy side.
"The sell-side desk is being transformed into a high-end, complex
the buy side," said Adam Sussman, a senior consultant at the
Tabb Group, a
Westborough, Mass., research firm. If the buy side is
having a breakdown with
technology, the sell-side trader is expected to
at least come up with an
intelligent answer, he said.
According to Boston-based Aite Group, about 25% of total equities
volume was driven by algorithmic trading at the end of 2004. The
adoption of these automatic software programs is one factor
that is driving the
need for more technology know how on trading desks.
"The skills that traders need have evolved and are increasingly
toward technology - It helps to have the ability to understand
technology," said Tony Huck, managing director of brokerage
Technology Group Inc. (ITG). His trading desk is made up
of people from a host
of different backgrounds ranging from mathematics
to computer sciences. "But we
are certainly hiring more people in
[technology-related] areas than ten years
are looking for a variety of skills, ranging from experience in
networks to knowledge in building trading platforms, said Sang
managing partner at the Aite Group, "They are trying to put together
that can cover all the bases."
Buy side desks are also
demanding more technical skills from the traders they
hire. Ted Oberhaus,
director of equity trading at Lord Abbett & Co. (LAB.XX),
manages over $100 billion in assets, says that one of the first
he asks potential hires is usually related to their familiarity
technologies. At present, only one of his thirteen traders,
an internal recruit
from the company's information technology department,
has a degree in computer
science. But he added, "It wouldn't be a stretch
of the imagination to believe
that in the future trading could be
dependent on a computer science degree."
Still, although degrees
in software or programming can be helpful in building
trading technologies, they often come with their limitations.
Investment firms and brokerages have accelerated their hunt for people