[ B U Y - S I D E C O V E R | C H R I S T O P H H O C K ]
yield and small to mid-caps in the equities space , highlights Hock . Meanwhile , liquidity shifting events such as news stories also have a cross-asset impact , meaning a combined desk is better equipped to manage them and traders can utilise these synergies and learn from one another to improve execution , he adds .
“ For us it ’ s important to engage with regulators and so it doesn ' t really make sense to look individually at certain themes for each asset class . It takes you a good time to build this network and so we want one person responsible for cash , equities , fixed income , and FX . When you have a big news story out in the market effecting an equity price you will also most likely see significant effects in the corporate bond and single name credit default swaps ( CDS ) market of that specific issuer , and there will probably be an impact in equity derivatives in the options of this corporate . This could also potentially have implications on levels in securities lending ,” says Hock .
“ Take a protocol like portfolio trading . That was just one way of trading equities five-to-10 years ago and now it ' s widely accepted in fixed income . Take RFQ mechanisms , which originally were designed for trading against risk capital in fixed income and in FX , which are now used in equities or algos that were originally for equities and are now used in FX . That ' s something you are missing when you do not holistically look at trading and assure that the individual asset class-based traders are talking to each other .”
“ When you do not have a proper settlement and clearing team , you run the risk of burning through hundreds of thousands of dollars .”
Technology
40 // TheTRADE // Winter 2021