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the size of our orders anymore because that flow has shifted , so in some ways they are less entwined with us .”
Market-moving events It is without doubt an eventful time to be a trader . Alongside the intense uncertainty brought about the global pandemic , markets have recently grappled with the end of the Brexit transition and were shaken by the now infamous GameStop saga .
Somewhat overshadowed by the coronavirus pandemic , 4 January 2021 was anticipated to be a market-moving event as the UK ’ s transition period following its departure from the European Union came to an end .
Sure enough , London suffered the loss of roughly ¤ 6 billion in trading volumes as flow moved to venues based in Amsterdam or Paris . At the same time , the UK ’ s market share in euro-denominated swaps plummeted from 40 % to just 10 % virtually overnight .
Lao , however , says that despite the major changes in market structure , the preparations undertaken by brokers and venues that took several years for many to finalise had paid off , and traders were still able to access the market and liquidity .
“ We expected a huge change - nobody really knew what would happen to the liquidity in the market ,” she explains . “ But honestly , on the trading side , there hasn ’ t been much change at all . It was smooth and straightforward because the work had been done by brokers to route orders to the correct venues . Everything happened according to plans .”
An event not featured in anyone ’ s plans was the GameStop saga . Markets were rocked in early 2021 as an army of retail investors swarmed the market to drive the prices of so-called meme-stocks up by , in some cases , a staggering 1000 %.
Institutional investors were left dumbfounded as hedge funds suffered short squeezes and had no choice but to close out positions or pump billions into funds to stay afloat . The events , driven by a surge in retail online platforms and alluring zero-commission trading offers , will likely change the investment landscape forever .
“ We were quite stunned ,” Lao recalls . “ It ’ s fascinating from a trader ’ s perspective to witness such a development in markets . It was never seen before and one would never have thought that retail could have such an impact .
“ But it did have an impact , not only on the market and market structure , but also on volume and volatility . I ’ ve read it is referred to as the ‘ retail army ’,
as if it ’ s totally unstoppable . This is a whole new world that institutional investors like us need to adapt to .”
Having worked through major market events like the global pandemic , Brexit and the GameStop saga , trading in volatility many market participants have not ever seen before , Lao could be considered a veteran buy-side trader in her own right .
While indeed the underdog in The TRADE ’ s Leaders in Trading 2020 Buy-side Awards , she has ascended from Rising Star status to being crowned the industry ’ s hedge fund Trader of the Year , still with many more years in buy-side trading ahead .
“ The award has given me even more encouragement to continue working as I do ,” Lao concludes . “ I ’ m very lucky to have opportunity to do this job and really enjoy it . The way I see things is if you like what you do , you ’ re proactive in your day-to-day job and learning something new whenever you can , you will thrive in this career .”
44 // TheTRADE // Spring 2021