Life hasn’t been easy for Wall Street traders in recent years—their ranks were thinned after the last financial crisis, and regulations since the subprime meltdown have made their jobs less profitable (and thus more expendable). Traders’ employers have paid billions of dollars in fines for the dumb things they’ve said in chat rooms (and for, you know, trying to rig markets). And if that’s not enough, it has become fashionable for bank CEOs to talk openly about automating as much of their workforce as possible.
But there’s one important sign that sales and trading jobs may be on the upswing: the Bloomberg terminal count has risen this year to 325,017, up from 323,981 in early October. The financial data terminals are a mainstay for traders at banks, hedge funds, and investment firms, which is why it’s a rough proxy for hiring and firing trends in the industry. The count fell last year for the second time in its history, to 324,485, as banks tried to find ways to save money, according to consultancy Burton-Taylor International.
Some say the Bloomberg terminal, which is especially popular among bond traders and costs more than $20,000 per year, is the world’s most expensive social network. Its messaging system ties together traders at many of the world’s biggest banks and investment firms. The terminal also distributes financial market data that’s hard to find anywhere else. With revenue of approximately $10 billion, the 36-year-old company has made former New York mayor Mike Bloomberg the eighth-richest person in the world, according to Forbes.
Greenwich Associates, a research firm, also sees signs that banks are hiring bond traders. While trading revenue has been subdued, Wall Street is betting that shifting monetary policy will help ignite profitable price swings in things like corporate and government debt. And profit-sapping financial regulations aren’t likely get tighter, and may even relax somewhat. US Federal Reserve chair nominee Jay Powell has said existing rules are “tough enough” (paywall).
Some global banks are able to think about hiring again because they’re healthier, at least based on risk measures such as leverage ratios, according to Moody’s Investors Service. Thanks to post-crisis regulations, lenders are regularly tested to see how they would hold up in a downturn, and their business models have gotten somewhat simpler and more transparent, according to the credit rating company. In the US, banks are hiring most heavily for things like information technology, equity derivatives, electronic markets, and quant research, according to Options Group, a recruiting firm.
“Trading desk reduction and subsequent personnel upgrades (hiring more people that are tech savvy in lieu of old-school-only traders) is behind us,” said Kevin McPartland, head of research for market structure and technology at Greenwich Associates. “The businesses for the most part have been made as efficient as they can be and need to be.”
Even computer-driven firms like New York-based Two Sigma, a quantitative hedge fund, have been hiring traders. The fund was set up in 2001 by computer scientist David Siegel and mathematician John Overdeck and has grown quickly (paywall).
Two Sigma’s buying and selling may be performed by algorithms, but human traders oversee the software and make sure it’s doing what it’s supposed to, according to chief investment officer Geoff Duncombe, who uses a Bloomberg terminal. He says humans can still do a few things the machines can’t: computers are trained using mountains of data, but a savvy human trader can learn from a single incident (or from a colleague). When markets go into never-before-seen territory, common sense can be the most valuable asset.