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Articles Q2 2021 Buy-side

Looking Toward a Post-Pandemic Trading Desk

With Paul Battams, EMEA Head of Equity Trading, BlackRock

Briefly describe BlackRock and the profile of the EMEA Equity Trading desk.

Paul Battams, BlackRock

BlackRock’s purpose is to help more and more people experience financial well-being. As a fiduciary to investors and a leading provider of financial technology, we help millions of people build savings that serve them throughout their lives by making investing easier and more affordable. EMEA Equity Trading is a centralized desk consisting of 15 traders that execute equity and equity derivatives for all BlackRock funds.

How has your trading desk adjusted to the past year-plus of mostly working from home? What have been the main takeaways / lessons learned?

Despite the challenges and disruption of the past year, from a trading perspective it has undoubtedly been a success. 

In terms of the working environment this past year has been a game changer. However, our strategy of investing into technology and enhancing our platform over recent years has really paid dividends.

We quickly pivoted to working from home and I have to give a big shout-out to our partners in Technology who rapidly equipped our Global Trading team with the necessary hardware and dedicated setup support. 

Traders were on the front line throughout the period with a real-time read on rapidly changing market conditions. Markets were open and traders had to stay plugged in and connected the entire time. There was no ability to pause, cancel or delay execution.

Technology has been the real enabler, but it was the traders themselves who put it to use so successfully. The commitment to execution and to delivering the best results for our clients, the knowledge and experience along with the deep, long-lasting relationships meant we were able to successfully navigate the challenging environment.

We’ve built a diverse team and we really felt the benefit over the last year. There were plenty of challenges along the way and everyone had their own unique experience, but one of the key takeaways, unsurprisingly, is communication. We took it for granted when we were in the office but it’s critical to the success of a trading desk. Not only in terms of markets and desk activity, but also on a more personal and social level.

What is the current logistical situation for your trading desk, and what is the plan to move back towards working in the office? 

The health, safety and well-being of our employees has been paramount throughout this entire period. As of right now (Ed. note: May 10), BlackRock is split into two teams on a two-week rolling basis, with team members able to come into the office during their designated two weeks if they need to.

There is a lot of work being done right now on what the return to office will look like. The office will continue to be our primary work location. It’s still early, but we will definitely be building on the positives from the last year and I am confident we will ultimately benefit from increased flexibility going forward. The trading desk of any firm is dynamic and must remain agile. No two days are the same and there will always be busy periods such as index rebalance events, expiry and earnings season where we may require more traders in the office.

For a trading desk, what has gone the smoothest, and what is ‘missing’ the most in a remote work environment?

The technology aspect has been the smoothest. With the electronic connectivity and tools available, it’s been just as easy to execute from home as it is in the office. As a result, we did not have to significantly alter our execution channels or strategy.

What’s been missing, or harder to replicate, is the communication and social interaction. You can’t see, hear or ‘feel’ what’s happening on the desk as easily. What’s driving markets, which investment teams are busy, which traders are busy, where the risks are, etc. The ad-hoc conversations with a colleague are much more difficult. You can’t easily tell if they are busy at that particular time, so you pretty much have to schedule a catch up, which isn’t ideal.

What have been the implications, of a remote or hybrid work environment, for innovation? Is it more challenging to innovate?

Yes – I think it’s a little more challenging. You need to work harder at it. Some of the most innovative ideas and solutions often come from those spontaneous face-to-face discussions, or a new person who you bump into in the office. As we think about the future of work, we need to think hard about how we maximise those direct interactions.

What logistical/technological changes put in place amid COVID-19, do you expect will remain in place post-pandemic?

One specific area where trading stepped up over the last year was in disseminating information more broadly across the firm and with clients. As the eyes and ears on the street our regular market and liquidity updates proved extremely valuable. Traders’ ability to filter out noise from the thousands of messages and data points they receive on a daily basis kept everyone well-informed during the period. These helped elevate the profile of trading and this will continue going forward.

We also further enhanced our alerting infrastructure for oversight and risk management. This is always a constant evolution but last year we successfully implemented some solutions that were extremely valuable especially while working from home. Some of our traders have coding skills which have been utilised to provide additional alerts which have proved extremely beneficial.

How are you thinking about mental health within your team? 

The pandemic has affected everyone differently. The stresses and strains have taken their toll.

Mental health has always been a focus for us, but it’s never been more important than it is now. Mental health has always been stigmatized but that needs to change.

We all need to get comfortable talking about mental health and make it a part of everyday conversation. Everyone has mental health, in the same way that we all have physical health. It’s not something that some people have, and others don’t. There is a spectrum where at one extreme you are healthy and well, at the other end you are in a crisis and really struggling and then there are various stages in between. Over time we all move up and down this spectrum.

The important thing is that we all listen to our bodies and look out for signs for what might be affecting us – in just the same way that we do with physical health. If we have a physical injury, have over-trained or are just tired – we think nothing of resting, talking about it to a friend or seeking medical advice. It needs to be the same approach with mental health. Be comfortable talking about it, look out for signs, seek help when we need to and look out for our friends and colleagues.

For me it’s important that I allocate time to spending quality time with my family, exercising regularly, respecting work/life boundaries, and switching off. Even small things like no meetings on a Friday afternoon, which BlackRock has implemented globally, are a great way for people to transition in to weekend mode. The afternoon is more relaxed, time can be spent on admin, cleaning up the inbox and catching up with colleagues more socially as opposed to barrelling into the weekend at 100mph at 6pm!