Chicago Traders Diversify

Terry Flanagan

As is the case for traders in financial markets worldwide, Chicago traders face challenges with regard to dubious liquidity and stop-and-start volatility. The industry group representing the professionals can’t change world markets, but it’s doing what it can to add diversity in its ranks, across asset classes and job functions.

“Many are more involved in compliance roles in addition to trading,” said John Alletto, president of the Security Traders Association of Chicago (Stac). “People are wearing many hats — there are more people involved in tech-related functions at firms. It is no longer just about the ‘Bulge Bracket’ space or being a trader.”

Alletto is almost halfway through his one-year term as Stac president, which runs through March 2014. Just 34 years of age, Alletto’s ‘day job’ is vice president and trader at Ariel Investments.

Adapting to changing markets is a eternal challenge for traders, and current conditions are especially lean. “If you are in electronic trading, or vanilla buy-side trading, or retail, it’s about survival,” Alletto told Markets Media. “We’ve been doing fewer algos and more block trading, but you still have to be there with algos, just fighting to adapt.”

At the national STA conference in Washington in October, leaders from across the country will be “running around the Hill talking to regulators, meeting with Senators and representatives and their staffs, on subjects including market structure and impacts of algorithmic trading – hot button issues,” he said. “They will have questions for us as well, and we’ll ask how we can help each other.”

In addition to expected remarks from U.S. Securities and Exchange Commission Chairman Mary Jo White and Congressional representatives at the national confab, there will be attention on the consolidated audit trail efforts and the JOBS Act. Chicago representatives look forward to hearing from Ed Provost, CBOE’s president and chief operating officer, and other exchange leaders, and to ‘fireside’ chats with  asset-management leaders, the Stac president said.

Stac membership has declined by about 20% in recent years to 500 currently, though more fresh faces at recent events is a hopeful sign. The local chapter has developed a new committee for improved social networking and opened its fundraising events to a wider audience, Alletto noted.

“The more diversity we have, the better,” he said. “I’m an institutional buy-side trader. I want to hear from those in futures and foreign exchange” among other disciplines, he added.

The Chicago trader organization has seen slow growth in its effort to rebuild; a lot of retail firms in Chicago have closed, Alletto noted. Due to the economy, some of the firms have cut vast sums from their sponsorship budgets, impacting Stac events, though there have been signs of improvement more recently.

Alletto said his goals for Stac are to help it expand, boost attendance at meetings, keep the focus on this year’s themes of charity and financial literacy, and get the organization back to where it was “in the good old days when the industry was booming.”

Stac surveyed its members this week on key concerns and what they would find to be beneficial. Findings will be reported in January, and Alletto expects the mindset to be very different in the year ahead from where it was a year ago, with “renewed excitement and enthusiasm for the business and networking, hoping we have weathered this storm.”

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