THETRADETECH DAILY THE OFFICIAL NEWSPAPER OF TRADETECH 2022
Jason Lenzo : Navigating change
What are the key challenges posed by today ’ s macro-economic climate to the trading desk and the buy-side ? In today ’ s trading environment , the macro-economic climate has led to increased volatility , wider spreads , less or sporadic volume in the market , coupled with a lower appetite for taking risk . We have also seen news cycle-driven volatility . Trading well , managing risk well , and ensuring the best-possible results in this environment require integration across the pallet of tools . This includes closely integrating portfolio management , risk systems , trading and market-facing technology , as well as market access through tools for evaluating performance and efficacy . Traders need to be trained to think like a portfolio manager , with a deep understanding of portfolio structure , but simultaneously understand how to execute well in the prevailing market conditions . In recent years , there have been significant movements around restructuring various firms , exchanges , dealers and liquidity platforms . Some of the changes have driven value to the investor in the form of centralised or differentiated liquidity . Other changes
Traders need to think like a portfolio manager to navigate the evolving macro-economic and regulatory divergent landscape , global head of trading at Russell Investments , Jason Lenzo , tells the TRADETech Daily .
have been in name only , while some changes look promising but have yet to be tested .
How can the buy-side navigate these using different strategies and technological innovations ? How has Russell Investments done so ? It ’ s critical to ensure that any new , innovative solution is centred on clear goals and real objectives aimed at solving real problems . In order to bring actionable information to the forefront , you need a well-developed decision mosaic with a deep understanding of order routing , where true liquidity resides , the expected cost of an investment and the actual performance contribution of each venue .
We consider all of these necessary elements in our decision mosaic to bring actionable information to the forefront . Too much information is not actionable , but distilling blocks of information into relevant and actionable information is key to success .
How is regulatory divergence post-Brexit impacting the markets and how can trading desks manage this ? Markets and exchanges have always operated on a set of differing rules , across various countries and regulatory jurisdictions . For over a decade , Europe has had the luxury of market rules that broadly rhymed with each other and sought or had synchronicity . For those trading desks that do have global
“ Traders need to be trained to think like a portfolio manager , with a deep understanding of portfolio structure , but simultaneously understand how to execute well in the prevailing market conditions .”
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