| A Day in the Life: spreading bets for success in interesting times |
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| From a spread betting challenge on Eamon Dunphy’s Breakfast Show to hedging for corporates, Dermot O’Donoghue, managing director with Delta Index, is a man on a mission – to open the world of financial spreads to all investors, from IFSC experts to the general public. |
006:30 am: Early start today because I am on the Breakfast Show with Eamon Dunphy to update listeners on our financial spread betting challenge. I’m running a little late but I still can’t resist taking the more circituitous Vico road into Dalkey because the views are splendid on sunny mornings like this.
07:30 am: Pop into the office to check how the US closed overnight and grab a quick cup of coffee; black, one sugar. The trading team have been in since before 7:00 am and the late shift won’t finish until 9:30 pm this evening. I have a quick chat with Paul Kenny, our head of trading, about the fallout from the result of the US election. Equities responded well but the dollar weakened on concerns about the US deficit. Trading activity really picked up once there were signs of a decisive result. All in all our clients did well out of the moves which we like to see. We have just moved into new offices in Ferry House on Mount Street so the Newstalk 106 studio is only a quick dash around the corner.
08:00 am: Eamon is in flying form for a man who has to get up at 4.00 am every morning. The competition allows listeners to trade an imaginary €10,000 and the player with the best return by Christmas wins €4,000.
Financial spread betting is something that appeals to a surprisingly diverse range of people, from IFSC types to those with little or no conventional investment experience. Irish investors are beginning to realise that their opinion can be as valid as any fund manager’s or stock broker’s.
9:00 am: Back to Delta Index. The rest of the team are in by this stage and I check with Chris Curran, our head of sales and marketing, how last night’s workshop went. We run workshops every couple of weeks to teach investors the basics of financial spread betting and some good trading habits. Chris is delighted with the response last night and also that the workshops are booking up quickly. I grab a quick coffee.
Oil is retracing sharply this morning which Paul is keeping an eye on as we have a few clients with long positions. Notwithstanding this, we like to see some volatility in the market as it gives our clients an opportunity to trade and make money. Financial spread betting is one of the few ways that investors can make money in falling markets so if anything we are generally more busy in bear markets.
10:30 am: Chris and I make a presentation to the senior managers in a large corporate to discuss how they can use financial spread betting to hedge their share option portfolios.
I explain that having spent 35 years in capital markets I am constantly amazed at how the private investor runs all sorts of financial risks that a corporate would never tolerate. Interest rate, commodity price, exchange rate and single stock exposures are run totally unhedged. I believe that financial spread betting brings an institutional type capability for hedging to the private investor. I love seeing the sudden flash of insight when someone realises the potential that financial spread betting offers for risk control.
12:30 pm: Lunch is a sandwich from OCB’s across the road - nothing fancy, just tuna on brown with a cup of coffee.
1:30 pm: The traders are all on edge because it is non-farm payrolls day. You can feel the tension in the air as they brace for the deluge of trades following the 1:30 pm announcement. The figure is much higher than expected and the trading screens and phones start hopping as the US market takes off.
2:00 pm: Weekly management meeting. Michael, our head of IT, gives an update on the new trading platform introduced over the summer which has bedded down well and it is encouraging that clients are now using the stop-loss functionality to better control their risk. Paul reports that we have seen a significant upturn in trading activity and that he has had no difficulties hedging client positions.
Paul leaves because Elan has taken off. We are probably unique among financial institutions in that our clients can trade Elan from 8:00 am in the morning to 9:00 pm in the evening. We are seeing good growth in new client accounts and we agree an increase in the marketing budget; Chris seems pleased. Of course, the most contentious issue of the afternoon is where to have the Christmas party!
4:00 pm: Well, it all seems to be under control here so I’m off home. I took a decision some years ago that I just don’t do traffic. It is too dark to play golf so it looks like the dogs will get a walk this evening. Killiney beach is always pleasant at this time of year. |
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| Article appeared in the December 2004 issue.
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