Schonfeld Fires 15% Of Traders, Blames Fast, Greedy Robots
by ilene - July 6th, 2010 4:04 pm
Schonfeld Fires 15% Of Traders, Blames Fast, Greedy Robots
Courtesy of Tyler Durden at Zero Hedge
The very special gift presented to 50 prop traders at Schonfeld Securities in advance of the celebratory July 4th holiday weekend… was a pink slip. The palliative reason given to these newly unemployed by founder Steven Schonfeld: it is all the fault of "black boxes, stat arb and high frequency trading." Welcome to the new paradigm – you are now all redundant. Only robots are allowed to trade with robots. But. But. We thought they only provide liquidity (er, viscocity – the specific gravity of motor oil is 0.8). Full letter below.
‘On December 5, 1988 we started Schonfeld Securities. Very soon after, we started hiring prop traders, and many years later formed “Opus Trading Fund”.
Prop trading has always been and will always be an extremely important part of our business and certainly the one that is closest to our hearts. The best Schonfeld traders will always have a place to trade and the capital to maximize their earnings potential. We are committed to them and will always strive to provide an environment for them to succeed. Sadly, however, we are re-thinking the notion that less skilled and less successful traders can be here forever without producing sufficiently for themselves and the firm.
For over 21 years we have always done everything we could, with the traders’ best interests in mind, to provide careers and opportunities for our traders.
We have always cared more than you could imagine for your careers, happiness, well being and future.
We truly admired many of your passions for trading and for the markets. Over the years we have stood by you and you have stood by us as well. There has been real loyalty on both ends and don’t ever think we took your loyalty for granted for one second.
Bull and bear markets come and go. Good trading markets come and go. But unfortunately, our vision of the future of trading has changed. It is getting much tougher for traders to make a living or get by. The direct competition from black boxes, stat arb and high frequency trading which continues to grow at exponential rates is here to stay and has caused us to change our outlook for lesser skilled traders.
Based on the above competitive changes to the trading arena, we