What kind of trading desk do you need?
5 Reasons for choosing a boutique brokerage
It’s a legitimate question. In the age of technology, are trading desks too “old school” for today’s trader, or are they more important than ever? Sophisticated traders--professional traders and those at Family Offices, small and mid-sized Hedge Funds and RIAs—see the advantages of using a skilled trading desk yet believe that securing these services is not practical for them.
Bulge bracket firms might seem the best choice, but for relatively smaller players there can be conflicts embedded in these services. Trading technology, while important in any equation, often isn’t enough on its own.
Yet it is possible to get the best of both worlds through boutique brokerages such as Triad Securities Corp. For traders who want access to the best trading technology and want to have experienced traders on call, our purpose-built fusion of “old school” -- phone calls and personal relationships - and “new school” – technology and automation - can be the perfect solution.
Below, we review some of the top reasons why traders might want to add a trading desk to their arsenal. Do any of these scenarios apply to you?
I want to work with fellow experienced traders.
One litmus test for how well you are served by your broker is the collaboration you have with the trading desk. The best traders today have experience, their ear to the market, and emotional intelligence. Years ago, traders were expected to be prickly and combative, even with their customers, as aggressiveness was seen as the best way to improve positions. Today though, the caliber of analysis and ease of interactions are much more important, and clients are more concerned with helpfulness as they work through their strategies.
In the broker marketplace, investors find there’s a wide gap between service offered to large institutional traders and small retail players. If you are in that middle ground, and your broker is in one of these extremes, you will likely find that you have little or no contact with a real trading desk. It’s a bit of a goldilocks situation, institutional shops focus on their largest participants, and retail brokers generally don’t have experienced or immediately accessible customer service people or traders.
Conversely, high-touch brokerages like Triad Securities specialize in experience and analysis. The average market experience of Triad traders is 16 years, and with little turnover in the team, they can work together seamlessly for their clients.
I am very concerned about trading conflicts
On both ends of the bulge-bracket and retail spectrum , traders may feel that their service is not entirely neutral. Retail-driven shops sell order flow, thus taking intelligence out of trade execution. Bulge bracket institutions, on the other hand, have large clients to consider and have their own trading desks. Thus, their mid-sized clients find that they don’t always get undivided attention and focus.
At the same time, some of the larger names have actively shed clients that don’t fit their business model. What looks like a small client on the institutional side, can be an important client for an independent broker.
What mid-to-large traders need is institutional-level service in an environment that is conducive to their business, where they can be confident in anonymity and know that they are not in competition or otherwise at odds with their trading desk. At Triad Securities, we do well if you do well. Our interests are completely aligned with yours and the traders on the desk will feel like a dedicated member of your team.
I have a concentrated short portfolio. Where can I get Hard to Borrows?
If shorting is part of your strategy, you might find that you must go through several hoops to find out if all the stocks you want to borrow are available with your broker. The ability to pick up the phone or send an email to your trading firm and get a quick response on a locate is a great advantage. Additionally, Triad Securities has access to a wide range of stocks, mirroring bulge-bracket availability. We work closely with the Street to locate stocks at multiple sources, all but ensuring that you can access the names you need.
As mentioned before, our trading clients are the number one concern of the firm, and of the trading desk, so we are securing these hard-to-borrow stocks for our customers and not for any proprietary trading or other activities. In addition to sourcing "hard to borrows", Triad Securities clients can also participate in a fully paid for lending program, which allows clients to gain additional yield by lending desirable long positions and sharing in the revenues.
What if I trade multiple asset classes--foreign markets, convertibles, IPOs, Secondaries, etc. and also need access to a great selection of algos?
Traders may think that to access the widest array of algos, they need to be with a very large broker. But at Triad we partner with many well-known algo providers to offer you a suite of algos which can be customized to your needs and strategy. Traders on the desk have expertise in executing on this suite.
We address international trading needs for our U.S. clients as well, with trading available in 35 countries. As investors look to balance their holdings, or get international exposure for any reason, we can help. We can provide the agility and access investors need, especially during this global crisis.
I want to focus on strategy and finding alpha and leave some of the trading to a team I trust. Additionally, I want to get orders filled without moving the markets and without incurring undue costs.
While seemingly counter-intuitive, having the right trading desk support can save costs by freeing up PMs and traders to focus on strategy. There may be times when you simply want trades executed reliably, perhaps over the course of a day, or simply to free up your time. Managers might believe that they need their trader sitting right across from them, but this is unnecessary with the right brokerage relationship.
As well, mid-sized traders might have a couple of people, but they don’t have the strength of a larger, more experienced desk. At Triad, we have 11 experienced traders on a dedicated desk. All the traders can see your order, meaning when you call the desk you don’t have to ask for a particular person; there is built-in redundancy to ensure that none of your time is wasted looking for someone to help.
At Triad Securities Corp., we’ve worked hard for over 40 years to become true partners to our professional trading clients, providing them with a technology platform and level of service that is unparalleled. If this sounds like what you’re looking for, we’d welcome the opportunity to demonstrate to you what we prove to hundreds of the industry’s most discerning traders each day.
About Triad Securities Corp.
Triad Securities, member FINRA and SIPC, is a full-service, agency-only brokerage firm. We provide superior and personalized Prime Brokerage Services to Hedge Funds, Family Offices, Managed Account Platforms, RIAs, Proprietary Trading Desks and Professional Traders.