UBS automates derivatives trading

Bloomberg reports UBS is following Barclays, Credit Suisse and Goldman Sachs in replacing well-paid credit-derivatives traders with computer algorithms in a move to cut costs.

Read: Why you should consider credit derivatives

“With regulators preparing rules under the 2010 Dodd-Frank financial reform that will push swaps toward exchange-like systems to improve transparency, credit dealers are going digital as automated trading makes humans too expensive,” the report says.

Read: US regulators review swaps rules

Algorithms cost several hundred thousand dollars to create and can move upwards of $250-million in a single trade, while annual salaries of credit-derivatives traders run into the millions, the report adds.

Read: More credit for credit derivatives

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.