Friday, May 18, 2012

Trader monthly toptick



Although it wasn't the top tick in terms of volumes or profits, the launch of Trader Monthly magazine in 2004 debuted at the height of sentiment in the trading community as US trading pits were making the transition to electronic trading.  The magazine, which was founded/funded by an ex-LIFFE pit trader, reflected industry swagger by featuring expensive watches, real estate, meals, boats, etc... and initially featured a male trader on each cover looked upon dreamily by a beautiful woman.  Encouragingly the publication's motto was "See it, Make It, Spend It."

From a liquidity standpoint most US traders were still flush at the time from their years of profits in the trading pits, proceeds from exchange demutualizations, and the first of what was a significant rise in trading volumes.  In Europe all the floors had closed by then and new trading arcades continued to emerge rapidly to supplement the many successful ones which were already in existence.  The US trading arcades were just beginning to hit their strides around 2004 and it was reminiscent of the dotcom boom in that almost anyone could get a trainee spot in one.  Additionally, well established pit traders were also investing heavily for their own electronic trading operations off the floor.

The 2004 markets were incredibly inefficient compared to current trading as algorithmic strategies weren't significantly rooted in the futures market yet. Geopolitical concerns including war, terrorism fears, and the rise of China's heavy resource consumption fueled volatility which prompted an increase of hedgers to utilize futures to lay off risk.  The US financials in particular had the rapidly emerging real estate bubble drive uninterrupted growth until the markets turned lower in 2007/08 and all this combined for big, juicy trading flows for Trader Monthly's audience. 

Even though the trading related articles were a bit shallow and the magazine seemed to celebrate material douchbaggery (sorry foreign readers, google translate won't get that translation right), I have to admit that reading every issue of Trader Monthly was a guilty pleasure for me.  Initially the focus was was on pit traders and proprietary trading arcades but the magazine took a similar path as Intermarket Magazine did two decades earlier by moving to a more institutional focus as the big money was advertising to bulge bracket and hedge fund employees.

As a sidenote, I had an interesting conversation w/someone who related how Trader Monthly tried to get advertising from a top tier luxury company and the company wouldn't even take free advertising because it wasn't an established publication and they couldn't risk their reputation by being in such a magazine.  Most of the advertisers were second tier luxury companies and it's a good lesson on how top tier reputations stay intact.

When the markets collapsed so the did the magazine and eventually shuttered in early 2009.  Afterwards the co-founding editor, Randall Lane, wrote an excellent book entitled The Zeros which I highly recommend to get an honest sense of how the magazine operated and of what a exuberant yet tragic era it was for the financial industry.  What amazed me about The Zeros is the tight budget Trader Monthly operated on and  it's flirtations with missing payroll but the most entertaining part of the book is the joint venture they struck w/narcissistic baseball player Lenny Dykstra to create a similar magazine for pro athletes.

I actually kept every issue of the magazine but threw them all away when I moved condos in 2008.  If anyone still has the entire collection, I'd be a low bid just to break them out many years from now for some laughs at the era that was.