Issue 55
A Day in the Life of a Trader
In the first of a new series looking at the jobs that make the market tick; the Alchemist looks at a ‘Day in the Life of a Trader’ through the eyes of Stephen Pender at INTL Commodities, located in London.
1st July 2009
07.15
Gold $929.00 Silver $13.61 Euro$1.4041 Oil $70.20 Copper $5040.00
Arrive in the office with my breakfast. The first thing I do is check out the charts for highs, lows and to see if any key levels or trend lines have been broken. Yesterday was one of the most active days we have had for a while, but there is little to report from the overnight session with both gold and silver climbing steadily.
Following our morning meeting, I start contacting customers to advise them of the overnight ranges and to discuss our views on the day ahead. We usually expect to see money allocated into commodities on the first day of each month, but after yesterday’s sharp sell off and weak close, we should also see some technical fund selling. This could make my morning a bit of a battle.
Away from the market we have a few key figures due from the US today. I expect that these will be a catalyst for the market as people start to build their positions for the new month.
08.00
Gold $932.50 Silver $13.67 Euro $1.4063 Oil $70.53 Copper $5060.0
The official start of my trading day. I take control of the orders and responsibility for price-making within my group. Precious metals are already moving higher, which is enticing customers in the Far East to take profit on their day trades.
Position – Flat
10.30
Gold $931.50 Silver $13.69 Euro $1.4062 Oil $71.19 Copper $5076.00
Nothing to report so far. Tomorrow, I must remember to bring a good book, something like War and Peace should get me through! Overall I am expecting gold to test $1,000 again this quarter so I have spent my morning looking for a way to reflect this through options, which have moved significantly lower recently. 3m call spreads look interesting, with yesterday’s pullback offering better strikes. I decide to wait to see how low gold can go before taking things further.
Position – Flat
Gold $931.40 Silver $13.63 Euro $1.4062 Oil $71.38 Copper $5070.00
Precious metals have come to a standstill. Whilst most of the other major commodities have continued to tick higher, supporting the start of month allocation view, this has not yet had an effect on the gold market.
At least I have lunch to look forward to. Well, maybe not, it’s a tuna sandwich at my desk – not quite the high-flying city life you read about!
Before NY opens, I decide to take a short position looking for gold to give back the $5 overnight gains.
Position – Short
13.30
Gold $938.00 Silver $13.77 Euro $1.4116 Oil $71.32 Copper $5122.0
Action at last! The APT number is released, which is weaker than expected and, as a result, gold turned bid rallying to $10 very quickly. I had covered half of my short before the number was released but I have to stop out of the rest on this move. This is frustrating but taking a position through figures is always a lottery.
I am receiving plenty of customer calls asking what is behind the move, although it seems, for now at least, that customers are sitting on the sidelines.
Position – Flat
15:00
Gold $938.35 Silver $13.70 Euro $1.4146 Oil $71.64 Copper $5125.0
The fix is relatively quick which is not always the case during the afternoon session as there is a tendency to try (usually unsuccessfully) and play the fix off against the Comex, making it a long drawn-out affair. Gold had tested as high as$943.00 but has now settled into a $4 range below $940.00. The ISM figures are published and are better than expected, providing some positive news for the US dollar at last.
I have been seeing steady selling and I decide to join the bandwagon hoping for better luck this time.
Position – Short
16:58
01 Jul 09 REUTERS-CHINA HAS ASKED FOR G8 ITALY SUMMIT TO DISCUSS ISSUE OF NEW GLOBAL RESERVE CURRENCY-G8 SOURCES
Gold $938.30 Silver $13.82 Euro 1.4188 Oil $69.68 Copper $5135.00
Stopping out again! I scramble to cover my short, fortunately I have some resting orders that I use to get long. This headline sends gold $10 higher to $947.00, and just like in the movies I manage to recover my day’s losses and come out with a small profit.
Position – Flat
17:30
Gold $944.60 Silver $13.94 Euro 1.4180 Oil $69.40 Copper $5111.00
The market has pulled back from the highs but still remains bid. After my lucky escape earlier, I decide to call it a day.
Non-Farm Payrolls tomorrow – it seems that there is every chance of the 4 July fireworks starting early this year!
Time to head to the Tube, which has been recorded at a sizzling 35˚c today. I decide to heed Transport for London’s advice and keep hydrated for my journey…See you at the bar in 5…
If you are interested in taking part in the “Day in the Life of...” series, please contact: Alchemist@lbma.org.uk
Stephen Pender Joined INTL Commodities Inc on 1 June 2009 as Chief Dealer for Precious Metals.
He previously worked at Fortis Bank S.A/N.V, where he covered market-making in both precious metals and base metal derivatives, and before that at JPMorgan as a precious metals spot dealer. Stephen is on the LBMA Public Affairs Committee.