Traders try to fight tedium of slow summer weeks
Reuters, 08.27.03, 1:19 PM ET
By Rachel Cohen
NEW YORK (Reuters) - With the summer doldrums in full swing as many Wall Street traders vacation, the unfortunate few left at work have to find ways to deal with low trading volume, high volatility and boredom.
The week leading up to the Labor Day holiday weekend and the unofficial end of summer is one of the slowest weeks of the year for U.S. stock markets. With so little going on, it does not take much to move the market.
Sometimes, creativity is called for to pass the time.
"I was at another firm where we made a miniature golf course around the trading desk ... during real slow times," said Evan Olsen, head of equity trading at Stephens Inc. in Little Rock, Arkansas.
Morning trade may be the best time to get into the market on slow days, traders said.
"During the summer doldrums, I find you can make the best trades of the day during the first hour or two of trading," said Harry Michas, stock index futures trader at manmarketmonitor.com on the Chicago Mercantile Exchange. "The volume is there and the institutions are all involved."
He said he goes back to trading during the last hour when institutions "once again get involved and usually look to even up their positions."
On Tuesday, U.S. stocks -- which had stayed in a tight range in negative territory for most of the day as investors shrugged off signs of economic recovery -- ended slightly higher on a boost from a late-day buying spree. Traders said the late reversal largely reflected a lack of market players, magnifying the impact of any moves.
Michas said the middle of his day is filled with research and leisurely meals.
"This has been a tough summer for me to lose weight, since my lunch hour has been expanded during this slow period of trading," he said.
MOVING THE MARKET
Moving the market on slow days may not take much more than a rumor, said Angel Mata, managing director of listed equity trading at Legg Mason Wood Walker in Baltimore.
"On slow days, some people start rumors," Mata said. "One of the rumors we had yesterday was that (Federal Reserve Chairman Alan) Greenspan had a heart attack and then died. So rumors are a a big thing during a very slow market."
U.S. stocks remained flat with trading very light Wednesday, with no economic data expected during the session.
"It is a tough time right now because there is not a compelling catalyst in the market outside of retail today," said Jon Najarian, chief market strategist with PTI Securities, an options and futures broker in Chicago. "Most traders are protecting gains they might have in anticipation of even slower trade tomorrow and Friday. The big trading for the week is probably behind us rather than ahead of us."
Najarian said traders might use the downtime to try out new software or systems because a glitch would be less of a problem. Other traders said they might catch up on compliance issues and research or troll the Internet or pursue recreational activities.
Olsen said traders in his office come in early to try to get a jump on trading during the slow period, but often to no avail.
"People do come in real eager trying to get things going but then as the day progresses, it's just not going to happen," he said.
The idle period for traders may not be much of a treat for people used to working in a normally faced-paced environment.
"For my mindset, it's kind of torturous," Olsen said. "I like for it to be active and busy." (Additional reporting by Doris Frankel in Chicago)
Copyright 2003, Reuters News Service |
