So much has changed in the last month for everyone; our routines have been turned upside down and our familiarities have been taken away from us. Our lives that reached out far beyond the end of our street have shrunk to the extent of our front doors for most of every day.
And yet, markets still rumble on. Yes, there is volatility and yes there is uncertainty, perhaps on a larger scale that we’ve ever experienced, but the markets still open, financial instruments and commodities continue to be traded and at the end of every day, there are still those that did well and those that didn’t do so well.
But how has the trading experience changed? Last week I spoke to a few and asked what the benefits of working from home (WFH) have been and what the drawbacks are.
The practicalities of the job – a secure internet connection, access to various software and communications with colleagues – don’t seem to have been adversely affected for most people, probably since most appear to be linked to their office networks.
“I’ve got a strong broadband [at home] but even so I’m pretty surprised I haven’t had more problems,” one Italian trader said.
“Strangely I have faster connection at home than in the office,” observed another.
Private networks mean that communications with support staff is pretty much the same as before, many said. And risk management is still ever-present for most traders.
“Within my [risk] limits I'm free to trade,” said one. “If I need anything urgently I call them.”
“I check my position with [risk management] during the day but that’s no different from normal,” said another.
“The back office seem to be working fine,” said one UK trader. “[They’re] pestering me less though, which is a positive.”
And as you might imagine, using just a single laptop to trade isn’t the norm. Many traders have at least two screens set up, and in some cases a few other refinements lifted from their office, like ergonomic chairs.
“Having too few screens can be difficult,” the Italian trader told me. “I’ve managed with just two, which are barely enough.”
Many companies have banned the use of third-party comms software such as WhatsApp or Zoom, and even though traders are still using their companies’ virtual private networks, they’re also developing new ways to stay in touch with each other away from those VPNs.
“My team is very reachable; we use various channels (maybe already a few too many),” said another. “MS Teams, Phone, WhatsApp, Skype, Polycom.”
And not everyone is so restricted. “It’s the Wild West where I work,” said one Continental trader. “Everything is allowed.”
The growth of virtual meetings amongst the general population mirrors the emergence of unofficial chat software like Telegram amongst traders, who still monitor the more official, polite conversation in chatrooms operated by the big news vendors like Bloomberg and Reuters, but who also dip into far more informal venues to swap jokes, memes and talk about market developments.
The language here may be salty, the content is often questionable, but anyone who’s spent time on a trading desk knows it is a high pressure environment. Throwing some salt around is generally how a lot of traders deal with the stress, and it’s easier to do from home.
What most people do seem to miss, however, is the work atmosphere. Almost half the people I contacted said they miss learning things though casual in-person chats and overheard conversations among colleagues. The ambient noise and energy of a trading desk will throw up all sorts of interesting titbits, some of which turn into good trading ideas, and many of which are probably unrepeatable.
On the other hand, the isolation has encouraged some to reach out to colleagues that they might not have spoken with frequently.
“I’ve talked even more than usual with the power guys to be honest,” said one carbon trader. “You cut back on things of less importance but with the Covid and the news from EDF last week I’ve had to spend a lot more time on the phone with colleagues.”
Freedom from Management
On the other hand most, if not all the traders I chatted with, are enjoying the relative freedom from management. Certainly, there are still some processes that have to be followed – daily conference calls with teams and managers – but traders are pretty clear about what they think about management in general.
“WFH also shows that some mini-emperors are wearing no clothes,” said one. “And without those meetings or discussions, some people actually contribute nothing to a team.”
“Middle management holds 1-2 hours of phone conferences daily, just to be involved in something,” said another. “[They] can’t wait to get back [to the office].”
Others have experienced the opposite. For them WFH has meant more meetings, as management tries to keep track of a distributed workforce.
“We seem to have more meetings and communication among the team as everyone wants to check everyone else is fine,” said one trader.
“This can mean productivity takes a hit as we all have meetings to chair. But we don’t have the pointless larger meetings that we tend to have with the wider team.”
On the other side of the coin, managing non-trading functions has become harder, says one team leader.
“We've certainly found ways of working better out of necessity. But a lot of things are genuinely harder to do remotely regardless of technology,” he said.
“I manage a team of 10+, about half of whom are quite inexperienced – they’ve been in the job a year or so. A lot of what I do is helping them and training them and it's much harder to react to their work when I can't see or hear what they're doing.”
Is WFH as profitable as working on a desk?
The jury is still out on this question. It hasn’t helped that the reason for WFH has been a pandemic that has thrown all markets into turmoil; volatility has been immense and quite a few traders have admitted that making money at this time is largely a matter of timing.
“I’ve not had better trading results, unfortunately, but I wouldn’t attribute that to the WFH style,” a UK trader admitted. “The market has been extremely volatile trying to understand the effect of supply and demand fundamentals of this pandemic.”
“Maybe the thin liquidity is due to everyone WFH, and that might also have affected volatility.”
Others say they have done as well, and in some cases slightly better, than they might have done working on the desk.
“I’ve had good results, but not because I’ve been WFH,” said my Italian corespondent. “I’d say it hasn’t affected my trading.”
“About the same, I think,” said another.
“I’ve had better performance from home because I can focus better – [there’s] less noise and useless banter,” said a third. “We still discuss work stuff on chat. So I’m actually more focused.”
Will WFH become more common after the pandemic passes?
There’s not a huge amount of optimism that companies will relax their standard WFH rules after Covid-19 is laid to rest. A quick poll among the sources for this story showed that around a quarter of respondents don’t think their company will change policy after the pandemic passes.
“WFH was always a massive no-no until this shitshow forced their hands,” said one trader.
“I think that, all in all, companies are against WFH,” said a continental trader. “It will take a lot of time to make companies change their mood on ‘smart’ working.”
Amidst the pessimistic outlook, though, there is some hope.
Most of the community are confident that this experience will at least lead to a discussion at trading firms about whether working from home is possible, even if only in a limited way.
“That argument is all settled now as far as I'm concerned,” said one contact. “Two days at home and three in the office, will slowly become three at home and two in office, which will then slowly become ‘in the office as needed’.”
“I’m sure we’ll talk about it, but there seems to be little room for such change, as trading from home is usually not permitted by my company,” another told me. “But I could think that if you have days where you trade less you can align [your positions] with a colleague and do the rest from home.”
“I do hope the company thinks about making us flexible,” said one. “But we have never been leaders of change and I feel that [only] if other companies start to make noises about [changing], then we will too I think.”
And some are even adamant that change will come.
“All in all I think that WFH worked far better than expected and some things will definitely change after lockdown,” wrote one source.
“If you show people that they are trusted normally, then they will respond by engaging their brains.”
From a more managerial perspective, there are concerns that staff progression would be harder to maintain under a more distanced working environment.
“In the short term it's fine, and we can sustain our current levels for months,” said one manager. “But my worry is that in six months’ time a few people will have fallen behind the normal progression curve. That’s fine as long as the senior people stay in the job, but historically people don't want to do tech support indefinitely.”
And what about their home life?
Traders being traders, I get a lot of jokes about social distancing within the home, together with tips on indoor exercises, which suggests that everyone is doing their best to stay fit and positive. After all, trading is (mostly) a young person’s game.
The main benefit however is the suspension of the daily commute, it seems.
“I don’t have to commute which is a massive plus,” one trader said, speaking for most.
He added: “I’ve spent more time with my dog at home. My girlfriend hates me, but that’s no change. “