Question about Bank/Fund Traders

Hi,

I would like to ask if traders at investment banks like UBS, GS or JP can trade FX Spot for their own account independently? And what about hedge funds? Because I saw that on broker applications, they are requesting that your firm is allowing you to trade FX if you're working in the financial services sector.

I recently posed this question to someone who prices derivatives for a bank. He said certain markets do require clearance to trade in but said forex is not one of them.

Edit: re-read your question. I see you were asking about traders and large ibs/funds specifically. access probably varies between a guy who works pricing vs someone working m&a deals behind a firewall. The overall response from the person I talked to was fx is a lot more lax when it comes to things like that though. He also noted that trading your own accounts is pretty hush hush in that business.

Thank you for your answer.

I don't see a big conflict if someone was trading at a IB FX desk and does also trading for himself, but you never know, regulations are getting tough.

To my knowledge, I believe this is equal to that of a 1980's stockbroker who knows all the order books and Stop levels. Therefore I think that a Trader at any firm who trades with clients money or companies money can't trade for themselves.

However I don't know if nowadays with ECN and really open order books if this still applies as anyone can see limit orders or stops.

1. Can't speak for bank operators in other jurisdictions, but where I come from, front-running clients' FX positions or requirements is big no-no, and can be grounds for dismissal (if the trader was an @ss-h0le in the first place.)

2. It doesn't really matter because it's done ALL the time, usually with the sanction of the trading desk chiefs.

3. One way to get around it is to trade from your personal laptop with your own mobile broadband to avoid using the Bank's network.

4. But we're supposed to be trading FOR the Bank on company time, right? When the heck else are we supposed to find time to trade our accounts?

5.So I guess we can only trade comfortably from home. Being caught making a mistake during company time (because we're distracted by our personal losses) can be expensive for the company.

6. Long story short, we're really not supposed have independent accounts, but there are always ways to get around the rules.