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Last Updated: Wednesday, 2 July, 2003, 22:36 GMT 23:36 UK
Sacked City traders go back to the floor
By Charlotte Parsons
BBC business reporter

Trading
Day traders like to hunt in packs...
Redundant City dealers have returned to the trading floor - but now they're paying for the privilege.

Job losses in the financial sector have helped spawn a whole new industry.

Independent trading floors, known as "arcades", rent spaces to ex-bankers trading their own money.

"We expand as the city contracts," said Arjun Rose, Director of Operations at Candlestick Trading Company (CTC).

"So lay offs are good for business."

Job losses

About 35,500 sector jobs have disappeared in the last two years, according to the latest Centre for Economics and Business (CEBR) figures.
City job losses
Total employment 2001: 320,000
Jobs lost: 35,000
Percentage of workforce: 11%
Source: CEBR
And the CBI foresees more job losses in the months ahead.

About 1,000 independent dealers trade at arcades in and around London.

The cost varies according to location.

At Schneider Trading Associates, in the heart of the City, a seat on the floor costs 1,500 a month.

That pays for a desk, a phone line and a steady stream of market data.

Atmosphere

The figure drops as you move out into the suburbs.

...they also miss the buzz of the trading floor
CTC charges about 900 a month for a space on its Shenfield, Essex floor.

Arcade owners concede that most of the services they provide could be duplicated at home.

But the atmosphere could not.

Ex-dealers are accustomed to working in a frenetic environment where facts and rumours are traded along with shares.

Many would find it impossible to work in the silence of their own rooms.

'Buzz'

By bringing groups of dealers together on a floor, the arcades recreate the excitement of the trading pit.

"There's a buzz around the office when there's a figure coming out," said independent trader Chris Gennings, who worked at Liffe's futures floor until it shut down.

There's no longer any reason for me to spend hours commuting every day
Chris Gennings, former Liffe trader
"People shout 'it's bullish, it's bearish, short it'. You wouldn't get that if you were trading at home."

Information-pooling is also cited as an advantage.

"There's a lot of different people in the room from different backgrounds of trading that have different ideas and different styles of anticipating things," said independent trader Lee Antonio.

"It just makes you more aware as a trader all round."

Technically, an arcade can be set up anywhere. The internet allows market data to reach everyone at the same time.

Suburban traders

But Schneider's managing director Jeremy Brown believes his floor's City location is psychologically important because it allows redundant traders to maintain their old routines.

"They're used to coming to the City and they're comfortable with that," he said.

"They're used to catching the 0620 train into work, and they can still catch the 0620 into work. So location does make a difference."

Suburban traders disagree.

"A lot of us have already done the City thing," said Mr Gennings, who works at CTC's Shenfield floor with about 50 other traders.

"Now it's about quality of life. Like many of these guys, I've got children. There's no longer any reason for me to spend hours commuting every day."

New arcade

But CTC recognises that many ex-bankers do feel more comfortable working in London's financial district.

Next week, it opens a new arcade at Canary Wharf targeting redundant brokers and traders.

"Our type of business is now a proven concept," Mr Rose said.

"There are people on our floors who are making a lot of money and doing very well.

"Our expansion is a direct result of the success of our traders."




SEE ALSO:
City of London 'over the worst'
12 Jun 03  |  Business
City workers 'want out'
29 Apr 03  |  Business
CBI predicts more City job cuts
07 Apr 03  |  Business


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