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Monday, 22nd April 2024
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A Day in the Life of a futures dealer Back  
John Wallace is managing director of MKW Futures, a financial futures broker/dealer based on the Finex Europe Exchange in the IFSC. MKW Futures is also an ‘introducing broker’ of Refco LLC, the largest clearer of customer based futures business in the world. Its affiliation with Refco commenced in 2003 and has led to a significant increase in its business activity onto other futures exchanges as well as Finex. John has been a member of the board of the Exchange in New York since 1996.
66.50 Like clockwork my two year old son wakes the household. Children have put alarm clocks out of business in our house. CNBC is put on in the bedroom so I can get a quick grasp of overnight movements in currency and equity markets although this morning as schools are off there is a demand for a change to Cbeebies.

7.10 I make my first call of the day to Tom Barrett who has the early shift on our financial futures desk. We were working orders for our proprietary book in the 10 Yr US T Note Future and I needed to check if we had any fills. After a quick discussion on overnight developments I run through our orderbook with Tom to see what is close for both customers and ourselves.

7.30 After a quick serving of breakfast to the kids I run out the door leaving my wife to wait for our childminder to arrive. I live in Clontarf but if I don’t hit the road before 7.30 I can forget about trying again until after 9.00. On the way in I call our Finex desk (on the hands-free of course!) and talk to Keith Barnes one of our dealers. He lets me know what fills we had in FX overnight and what orders we are placing this morning for our proprietary book.

7.55 Arrive in Finex just in time to catch the open of trading on the floor. Kevin Ryan our head trader is off this morning getting a check-up on his broken leg that is just out of plaster. This leaves me with the order book this morning but thankfully it’s a quiet start and most of our orders are a bit away from the market.

8.45 Markets have settled down a little with the early rally in the euro petering out and it is now slowly coming off. A lot of the business we do in the morning on Finex is in the dollar index and as this is comprised of nearly 60 per cent euros, every tick in the euro is watched with great interest. I sit down at my desk which is just off the trading floor, and start ploughing through the morning emails. It’s amazing how much time I seem to spend deleting ‘spam’ from my mailbox before I can get at the real correspondence.

9.30 I have a quick meeting with Eoghan MacSweeny who runs our back office and we review the previous days P/L and commission numbers. We also take a look at our funding requirement in our various accounts. We have recently appointed Deutsche Bank as our prime broker for all our cash FX business and were still getting to grips with the reporting of this account. I spend a lot of time reassuring myself that the P/L our traders report is accurately reflected in our various futures and cash accounts.

10.15 I meet with Pauline Leahy who runs the Exchange for us here in Dublin. We recently relocated the Exchange within our building to new premises. This was part of an overall rationalisation programme we undertook over the last 18 months. Our parent Exchange in New York was destroyed in the 9/11 disaster and this prompted a major review of all the Exchange’s activities including ourselves. The relocation has gone extremely smoothly thanks to the efforts of our Exchange staff and the help of our 40 or so members.

11.30 Kevin Ryan arrives back from hospital having been given the all clear on his broken leg. It has been interesting watching Kevin hoppling in and out of the trading pit on crutches over the last few months. Perhaps next time ‘snowboarding’ will be left to the teenagers! We have a quick chat to review where we are vis a vis positions and our order book and we discuss reducing some of our exposure prior to the release of US Weekly Jobless claims at 1.30. The US has been experiencing the unusual phenomenon of a jobless recovery and markets are eagerly awaiting any sign that the growth has spread to the job market.

12.00 I return to my office and get through more emails. The agenda for our latest board meeting has arrived so I review the major items such as the establishment of a Euro Index Futures Contracts that we hope to list on the Exchange during the summer. We have a successful franchise in our dollar index (DXY) and it is an often-cited benchmark for movements in the US dollar. We’re hoping to extend this success into a Euro Index Contracts, which will be loosely based on the NEER (Nominal Effective Exchange rate) for the euro published each day by the ECB. I arrange a conference call with our chairman in NY, John Marchisotto and Joe O’Neill our senior staff member responsible for Finex in NY for later that afternoon. These calls usually take place at 8.30pm our time, which is after the NY close and make for a long day.

12.45 Lunch today is with a Scandanavian customer of ours who has come over to finalise some business development plans we are working on with him. My business partner Keith Hazley works closely with a lot of our clients who fall into the ‘emerging’ trader category, and we provide assistance to them ranging from consultancy on regulatory issues to capital introduction. Our affiliation with Refco also allows us to offer a very broad range of services to trading advisors and hedge fund managers and this has provided a great source of business growth for us.

1.30 I duck out of lunch briefly to call the Finex Desk and check what the reaction to the numbers is. As anticipated the jobless claims are reflecting a continuing improvement in the employment market in the US and the dollar is regaining some strength on the back of this. Bond markets are showing some unease at this as the prospects for US rates are clearing erring on the upside. We were pretty well positioned for this but as we had reduced risk we didn’t get as much out of the dollar rally as we’d had liked but managing risk is the single most important thing a good trader does so no regrets.

2.00 Back to the office to go through more emails. One of our customers has just been allocated
some new capital from one of our sources and is mailing us to get all the documentation established so we can do business for this new account. Our business growth is also closely related to the growth of our customers and their success is of great importance to us. This client has established an outstanding track record and we are very optimistic about his prospects for success. Keith Hazley takes care of all our regulatory and compliance issues, which are many, and he loves nothing better than customer documentation preparation!

3.00 Back our to the trading floor which is now closed and the session has now moved to our NY Floor. The Exchange in New York moved into a new building six months ago and now shares a floor with gold, silver, cotton, coffee, sugar, cocoa and of course frozen concentrated orange juice. We pass along orders to our counterparty in NY who works them for their session. Since the move, the NY Floor is extremely noisy, being surrounded by these other markets and getting our orders passed correctly is hard work.

4.00 I put a call into our Refco liaison person, a good second generation Irish American by the name of Marty Malone, in Chicago to discuss issues ranging from branding to account funding and commissions. At this stage I’d say we have dealings with over 100 different people in the Refco organisation and we’re sometimes responsible for introducing work colleagues to each other. This is because Refco’s growth over recent years has mainly been through acquisition and the expansion of the affiliate/introducing broker network of which we are a part and we often encounter people who are as new as us to the organisation.

4.30 Our guys who started early start filtering out. I check with Kevin how we’ve done and overall were in good shape more so because in slow markets the tendency is to overtrade and try and make things happen and today we kept our discipline and only traded when things started moving.

5.15 Another review with Keith and Eoghan about our Deutsche Bank prime brokerage as the guys have spent the last hour onto a support person for Deutsche Bank in New York going through the finer details on the reporting of our account. Change is a difficult process to manage at the best of times especially in a small company like ours where old habits die hard.

5.45 I hit the road and call home to say I’m on my way but how long it will take is anybody’s guess. I have to travel up the East Wall Road to get to Clontarf from the IFSC and the Port Tunnel works have made this a nightmare. I suppose it will all be worth it when the Tunnel takes the lorries off the city roads but it is another two years of madness first.

6.20 Arrive home, 35 minutes not bad! My wife is just behind me and we decide who cooks and who chases the kids. Looks like my famous chicken stir fry is getting an outing.

8.30 Kids in bed asleep time for my conference call to NY, which lasts 45 minutes. We agree to hold the next board meeting in Dublin to coincide with the official opening of our new trading floor.

11.15 Still up, just check CNBC to see where currencies are opening up in Asia. I want to go to bed but RTE schedule the West Wing very late and its one of the few ‘must see’ programmes I watch.

12.15 Finally bed… roll on 6.50!

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