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ers. And Joseph, of course, who says that the
desk is roughly divided into two main groups.
“I think of people as being either part of
program and automated trading - those who
handles orders in aggregate, either looking at
automated orders and working on an almost
exception management basis, adding value to
a number of orders in aggregate that are being
automated – and specialist traders, who typ-
ically handle more illiquid orders which can
be around two days’ volume on average, so it’s
very much a specialist role,” he explains.
No trading desk stays the same for very long,
particularly not one operating under a name
like JP Morgan. The organisational structure
of the desk itself may have evolved over time
but it is the way in which the various parts
interact that has been both the biggest change
and differentiator, as well as working closely
with other teams. Technologists and the ana-
lytics team are co-located on the trading desk
in order to develop a harmonised approach
to new challenges or the development of new
tools, which Joseph says has been fundamen-
tal as the desk handles increasing levels of
orders and volumes.
“For instance, in EMEA the number of or-
ders per trader has increased by 70% over the
last three years.” he says. “It’s a testament to
our overall setup that during that same period
we have seen an improvement on our imple-
mentation shortfall of 6% as well. This is down
“We implemented our first automated trading
system in July 2009, which was probably
one of the first implementations of its kind.
People now talk about the ‘algo wheel’ and I
think we were relatively early in building this
type of functionality.”
26 // TheTrade // Summer 2018
to a mix of highly-skilled traders,
well-deployed technologists and a
well-resourced analytics team.”
Automation, according to Joseph,
is a key tool here and he acknowl-
edges the skill and investment re-
sources of the firm at his disposal,
specifically when tackling large-
scale projects such as the imple-
mentation of MiFID II or manag-
ing increasing volumes. This year
the firm implemented the ability
to automatically trade liquid cash
flows across its EMEA operations,
where cash flows sub $100 million
can be traded 100% autonomously,
freeing up traders’ time for more
complex work. Joseph notes that in
addition to more orders per trader,
the notional traded per head over
a five-year period is set to be an
increase of 270%.
“We need to be able to handle
that kind of trajectory,” he asserts.
“The number of programs we have
traded over the past two years has
gone up by 10 %, so we need to
find solutions to allow traders to
continue adding value in terms of
keeping costs down while handling
more volume and complexity.”
While most of the industry
prepared well enough in advance
of the arrival of MiFID II on 3
January this year to mitigate major
negative impacts, the effects on the
trading desk have been noticeable
so far. Joseph says that for Q1 this
year there was a 30% increase in
trades done via the cash desk and a
10% decrease on electronic trading
when compared with the same pe-
riod last year, although this was a
gradual change rather than an im-
mediate one as industry prepared
for the new regulatory regime.
“People might have been thinking
a lot about the double volume
caps that were published in mid-