Now that the biggest banks' 10Q reports have been filed, containing charts showing incidences of profitable and loss-making trading days during the most recent quarter, we can form a picture of what it may have been like to work there as a trader. Unfortunately, Citigroup seems to have dropped the chart from its 10Q this time and J.P. Morgan has decided to only show a chart for its trading days in Q1 and Q2 combined, possibly due to various challenges in Q2.
That leaves Goldman, Morgan and Bank of America to assess. Here's what we concluded:
Goldman Sachs: Big risks, big profits, big loss tolerance
- Six days of trading losses in the second quarter
- Two days losing more than $50 million
- 15 days making more than $75 million
As was the case last time we looked, Goldman Sachs comes out as the big risk taker, whose risks pay off more often than not. It made big losses on two days last quarter and fairly big losses on one.
Morgan Stanley: Small risks, small profits, big losses
- 15 days of trading losses in the second quarter
- No days of losing more than $50 million
- Six days of making more than $75 million
Once again, Morgan Stanley’s traders come out looking bad. Not only did they have more than twice as many days of net losses as traders at Goldman Sachs, but they had comparatively few days of making big profits. On the other hand, they had no days of really huge losses – probably because Morgan Stanley doesn’t trust them with any risk.
Bank of America: An exemplary performance
- Zero trading losses in the second quarter
- 26 days of making more than $75 million
Since Tom Montag took control, Bank of America’s traders have turned their game around. The second quarter was exemplary: there were no losses and far more days of large profits than elsewhere. Bank of America looks like an organization where traders are given big risk limits and where they put them to very good effect.