Traders at Goldman Sachs, JPMorgan & Morgan Stanley are working harder for their bonuses
If you're a trader at a major US bank, you should be paid more this year. Johnson Associates, the Wall Street pay consultant, thinks equities sales and trading bonuses will be up 20%-30% and that fixed income sales and trading bonuses will be up 10%-20%.
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Optimism on pay reflects rising revenues. Volatility has been kind to banks' market making businesses. Equities sales and trading revenues at Goldman Sachs were at their highest level ever in the second quarter of 2025, for example. At Morgan Stanley, CEO Ted Pick noted that the bank used to talk about generating $1bn of fixed income trading revenues per quarter, but that the business has generated a solid $2bn a quarter for "a whole bunch of quarters."
Times are fine. But this doesn't mean that they are easy.
Regulatory filings for banks' trading businesses in the three months to June 2025 reveal that banks have had more days of high trading profits this year than last year. But they have also had more days of high trading losses.
At Goldman Sachs, for example, there were more than 19 days in the second quarter of 2025 when trading positions generated daily net revenues in excess of $100m, compared to 11 such days in the same quarter of 2024.
At the same time, though, there was one day when Goldman lost $25m-$50m and one day when the firm lost $50m-$75m in the most recent quarter. In 2024, there were more days of minor losses at Goldman and more days of minor gains.
Filings for Morgan Stanley and JPMorgan suggest a similar pattern. At Morgan Stanley, there were 16 days when the bank made over $75m of trading profits in the recent quarter, compared to only seven last year. However, although the bank had no days of trading losses, there were five days when its total value at risk was up to -$40m, compared to none in Q2'24. At JPMorgan, there were four backtesting exceptions in the past quarter - more than in any of the three prior quarters.
The filings reflect the volatility of the trading environment under Trump's on and off again tariffs. Macro traders in particular had a strong second quarter, but in May they were complaining of being "whipsawed." “Clearly traders are already exhausted," one head of macro trading told Bloomberg in March.
The year isn't over. If traders make it through without any big blow-ups, they may consider higher bonuses well deserved. Alternatively, banks may want to divert some pay to the risk managers who are keeping things in check.
Goldman Sachs: profitability of trading days in Q2 2025
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