In addition to traders assuming less risk as a result of lousy bonus payouts, headcount cuts are taking a toll as well. This week Societe Generale’s New York branch let go of six traders who added tons of liquidity to the market my scalping pips between the various trading platforms. In addition, Bank of America let go of the bulk of the trading desk at Merrill Lynch last week, removing a former market heavyweight.
Look for markets to remain more volatile than usual as we adjust to fewer players handling ever-growing volumes.
