Meet the Institutional Trader, Tom Murphy (Maven Securities)

Meet the Institutional Trader, Tom Murphy (Maven Securities)

What is a typical day like for you?

A typical day for a trader involves a fairly early start. For me, this is just before 6am. I study what happened overnight, particularly in the US and Asia, before the European markets open. So when I arrive in the office, I already have an understanding of what has happened, and what the important events are that might be coming up in the next few days and weeks.

Then when the market opens, around 7am, I will engage all the electronic systems, make sure the phones are working and then start to stream my prices into the marketplace. Once trading begins, I will be observing what trades are happening, what prices and what instruments are being traded; and I will be looking at how all of this is feeding into risk and adding to our existing positions. I will be manually checking the automated decision-making to see if I think it is reasonable, as well as looking at our systems and how they are operating. 

Alongside this, I’ll be looking at what is happening in the world and I might also do some research projects or some coding. The day runs from 7am until 5pm and then once the market is closed, I’ll make sure all the trades are cleared correctly, review and write up the day and finish by around 6pm.

What is it about market making that appeals to you?

The appeal of market making is that it is a very complex and multi-faceted problem, with lots of ways to approach it and lots of ways to solve it. Alongside this, it’s also very immediately demanding. You have to price, take risks and be constantly present in the market. This is what creates such a buzz and a drive of adrenaline, that makes it a fun and interesting role.

“You have to price, take risks and be constantly present in the market. This is what creates such a buzz and a drive of adrenaline, that makes it fun and interesting role.

How did you get into market making?

I always enjoyed maths, problem-solving, games and competition. I read up about trading and saw it involved those particular traits. Then with market making, it also added this layer of technology on top as well because it’s very code and developer driven. All of these combined made up my interests, and what led me here.


Tell us about who you work with? What are the other roles in your team?

There are the traders, like me, who are responsible for providing the prices, doing the trades and managing the risks. Alongside them are the Quants, who are responsible for providing the models to create the pricing. Then there are the data scientists who are responsible for finding, cleaning and providing the data that everyone can use. And lastly, there are the developers who are responsible for the coding. They ensure its production quality and working as it should be.

 

To find out more about Maven Securities visit www.mavensecurities.com

Lockdown restrictions liberated market making firms to reap the benefits of difference

Lockdown restrictions liberated market making firms to reap the benefits of difference

Interview with Ian Firla, Head of Innovation, OSTC Ltd.

Q. The #WeAreMarketMakers campaign has been launched to help the world to better understand who market makers are and what they do. As a senior figure within a global market making firm, what would you want the world to know?

 

That market making is changing. It’s no longer that image perpetuated by the media and film, of traders in coloured jackets flailing their arms around. Yes, there are a lot of white men in the industry, but you don’t need to be one to take part. It’s really important for people to know that. You need a sharp mind. To be good with numbers. You need to understand risk. And you need a passion for the markets. But beyond that, it doesn’t matter.

There’s a growing focus now in this industry on diversity and inclusion in recruitment, and ensuring everyone has access to the right education opportunities. As a global proprietary derivatives trading firm and educator, I’m proud that OSTC is at the cutting edge of this. It’s a really exciting place to be.

“ You need a sharp mind. To be good with numbers. You need to understand risk.
And you need a passion for markets making may have several beneficial effects on markets. But beyond that, it doesn’t matter.”


Q. The first of FIA EPTA’s thought leadership reports for the campaign looks at how liquidity, and market making, changed during the pandemic. What effects did the pandemic have on you and the team at OSTC?

It’s been quite interesting to observe the impacts of the pandemics on the markets. There have been issues of liquidity, for sure. Though in our own experience, these have perhaps not been as profound as they have been for others.

But what we have found is that the pandemic has really emphasised the point that anyone can trade and do their job from anywhere. OSTC has had a programme allowing anyone to work from home, and we have found that it has really expanded and extended our latest recruitment drives. People who have been trained remotely, and developed remotely, are now operating as market makers and liquidity providers remotely.

In this respect, the pandemic has helped to emphasise that a well-trained and well-risked individual can do his or her job from anywhere. And that really liberates firms like ours to be able to recruit the best talent, and inject the best liquidity into the markets, from anywhere.

“The pandemic has helped to emphasise that a well-trained and well-risked individual can do his or her job from anywhere. And that really liberates firms like ours to be able to recruit the best talent, and inject the best liquidity into the markets.”

 Q. There can be a perception that market makers are just algorithms. How important is human direction in market making?

The human touch is extremely important in market making. It’s exactly why we have such a focus on recruiting diverse talent. If you have a group of people in your team who all think the same way, and are hoping to do the same thing, they will programme algorithms in the same way too. They will all point in the same direction.

The greater diversity of people you have within your team, the more creativity you get, and the more you are derisking what you do. Because you know that someone will always bring an alternative view point, in a way that they wouldn’t if you were only working with a group of very like-minded individuals. At OSTC we are really reaping the benefits of difference.

 Q. Given market makers, through liquidity provision, play an additive role in the markets and wider society, why do you think they were given a bad press in the past? 

Honestly, that has always been curious to me. Market makers are literally performing a function. We are providing liquidity, without which the markets would be a far riskier place for both the buy side and sell side to engage. In fact, the risk being introduced to markets without market makers’ presence would be highly amplified. Market makers help to make markets more stable, more secure, for everyone.

OTSC is a global derivatives trading firm and educator providing liquidity globally on most of the major exchanges. It prides itself in its inclusivity and diversity programmes.

For more information on OTSC visit: www.ostc.com

‘Liquidity in the Time of Covid’ – Download the report

‘Liquidity in the Time of Covid’ – Download the report

Covid-19 continues to redefine the trading landscape in Europe. Changes in liquidity formation already in play due to the increased use of automated trading and rise of passive investing were accelerated
as traders rushed to make changes to investment strategies due to the pandemic. Remote working, greater reliance on cloud technology and the high volatility early in the pandemic created new additional challenges which is resulting in the industry rethinking trading partners and access points to liquidity.

The study is written by independent financial services research group Redlap Consulting. It was commissioned by FIA EPTA, which represents Europe’s leading market making firms, to drive greater understanding of what independent market making firms do, and their contribution to both financial markets and the wider economy.

Redlap Consulting conducted interviews with 30 Global Heads of Trading at asset managers with $35.6 trillion (€30.36trn, £25.9trn) in assets.

Report author Rebecca Healey, founder of Redlap Consulting, said:

“Covid-19 continues to redefine the trading landscape as the pandemic lifted the veil on the role market-makers can play in liquidity formation. Liquidity challenges in bond markets early in the pandemic created a vacuum forcing the buy-side, to find new trading partners and access points to liquidity – and market making firms stepped up to fill the void. Now as asset managers continue to partner more directly with these firms, they have been able to benefit from a wider, more diverse pool of counterparties in how and where they can execute investment strategies; while liquidity providers have the opportunity to re-position themselves and build new partnerships.”

The FIA European Principal Traders Association (FIA EPTA) represents Europe’s leading Principal Trading Firms. Its 30 members are independent market makers and providers of liquidity and risk transfer for end-investors across Europe. It works constructively with policymakers, regulators and other market stakeholders to ensure efficient, resilient, high-quality financial markets. To find out more visit fia.org/epta

The report is the first of three being produced to mark FIA EPTA’s 10th anniversary which is being marked by a new campaign to drive greater understanding of what independent market making firms do, and their contribution to both financial markets and the wider economy.

#WeAreMarketMakers Campaign Launched To Promote Better Understanding Of Market Making Firms In Europe

#WeAreMarketMakers Campaign Launched To Promote Better Understanding Of Market Making Firms In Europe

London 27 September 2021

A new campaign to promote better understanding of modern market making, what it does and its benefits for wider society, has been launched today.

#WeAreMarketMakers is a campaign by FIA EPTA, the European industry body for independent market making companies, as part of its 10th Anniversary activities. The project is not only supported by FIA EPTA’s 30 member firms, but also by others in the markets community that work directly with and alongside the industry.

The campaign seeks to help inform and educate stakeholders on the important role that market makers play: from providing liquidity to the global financial markets, to supporting citizens’ pension pots.

It also aims to debunk some of the myths surrounding the industry, and put forward the people and innovators behind the industry.

The #WeAreMarketMakers campaign will be led through an integrated communications campaign and built around a series of independently-produced thought leadership reports looking into liquidity provision, innovation and sustainable finance.

The first report – Liquidity in the Time of Covid1 – is being launched next Monday with a panel discussion at the International Derivatives Expo (IDX) conference in London. It focuses on the impact of the pandemic on liquidity provision and how market makers played a vital role supporting asset managers.

The campaign will also create a new microsite about the sector, explaining what it does and its contribution, with news articles, blogs and videos as well as data and facts about the industry. The campaign website goes into detail about how market makers benefit everyone in society, from pensioners, farmers, businesses and even governments.

Notes to editors 

  1. Liquidity in the time of Covid – a report by Redlap Consulting 

“Our industry can sometimes be hard to grasp and our presence and impact is not always obvious – but we are always present in the markets and have been fundamental to the resilience of European financial markets, including throughout the Covid-19 pandemic.

We are excited to bring our ten-year run of engagement with stakeholders to a new level with this campaign, and are keen to reach new audiences to make them aware of the tremendous contribution of market makers to well-functioning markets that benefit everyone in society.”

– Mark Spanbroek, Chairman of FIA EPTA
Building New Liquidity Partnerships – The View from the Buy Side

Building New Liquidity Partnerships – The View from the Buy Side

A liquidity drought in Europe’s bond markets in the early stages of the Covid-19 pandemic accelerated a structural shift in how asset managers engage with independent market making firms and see them increasingly as trusted partners.

These are the headline findings of a new independent study into the impact of Covid on capital markets by Redlap Consulting, a specialist research firm.

The study, Building New Liquidity Partnerships – The View from the Buy Side’, will be discussed at the International Derivatives Expo in London on September 27th. It is based on interviews with 30 Global Heads of Trading at EU and UK asset management firms with over $35 trillion of assets under management.

Rebecca Healey, Managing Partner of Redlap Consulting, will moderate the panel discussion, which will feature Piebe Teeboom, Secretary General of FIA EPTA, Robert Miller, Execution Consultant from Vanguard Asset Management and Andy Mahoney, Managing Director of FlexTrade Systems.

The discussion will look at how Covid-19 continues to redefine the trading landscape as remote working, greater reliance on cloud technology and the high volatility early in the pandemic impacted how the buy side accessed liquidity.

And why today asset managers are looking to benefit from a wider, and more diverse, pool of counterparties to create greater optionality in how they can execute their investment strategies.

The session will shed light on what changes buy-side firms are making, which trends are here to stay, and who will the trading partners of the future be.

The report, which will be released publicly on September 28th, is part of a new campaign about the market making community, called #WeAreMarketMakers, led by FIA EPTA.