Wall Street From the Basement: One Trader Talks Remote High Risk Business

I don’t know about you, but when I imagine ‘Wall Street,’ I picture fancy offices in sky-high buildings and men and women decked out in the height of business attire. It’s a world we hear about all the time in the news: stock market dips and powerful CEOs.

In the midst of a pandemic, this world is still in full swing. The stock market has been notably rocky, and business goes on. It just looks a little different now. Forget the high-rise buildings and tailored suits, the new normal is a laptop in a corner and a t-shirt. The Edge spoke to Alan Milstein, a managing director who runs leveraged loan trading at GSO Capital Partners, a division of Blackstone, to learn more.

Now, full disclosure, this is my dad. I decided to talk to him because I know that in his position, he and his coworkers deal with trading large quantities of money on a daily basis. It’s a high risk and high reward industry. And now it’s being done from home—our basement specifically. Instead of being able to make high stakes decisions about large sums of money in a room full of analysts, traders, and other support, such decisions are being made sitting home alone.

Milstein spends most of his day in the basement where his makeshift home office is set up with equipment he needs to do his job, including dual monitors, a Bloomberg keyboard, and a phone system hotlined to the people he would otherwise be sitting alongside.

He was at this makeshift set-up in March when the stock market took a historic hit in response to COVID-19’s rising prominence.

“It was pretty remarkable being at home and watching the market crater like it did, like nothing we’ve ever seen before,” Milstein said. “And sitting at home in my basement, just kind of staring at all the screens I look at, I was just in amazement at what was going on in the world. … If we were in the office with the downturn in the market the way it’s been, it would have been chaos.”

Since the downturn in March though, the market has bounced back and there are other elements of conducting business from home to consider. One problem with not being in the office is the lack of face-to-face communication. Especially when you’re expected to make big decisions very quickly, having other people’s input can be important.

“A lot of what we do is instant communication, so I’m talking to the traders next to me about trades we’re doing, and not having that instantaneous feedback and just daily banter does affect [our work],” Milstein said. “But I think we’ve overcome it.”

Being outside the normal office setting also makes room for other distractions. Milstein references coworkers who are working in less than convenient circumstances, whether it be their parent’s bedroom (because that’s where their wifi router is) or a NYC studio apartment with kids running around.

“We’re on Zoom calls all the time where kids and pets are coming in, and it’s constantly being disrupted,” he said. “But I think everyone just knows that we’re all in the same situation and no one gets angry that someone’s crying baby is disrupting the call, or whatever it may be.”

I wondered whether working in such a high stakes industry from home with all these new factors upped the risk level.

“I think it did because the trading partners I have… some were on their cell phones and a laptop rather than being in front of their five screens at work,” Milstein said. “So, I’m going to say there was a little less liquidity in the market.”

Well, I have no idea what that means, so I spoke to Elon assistant professor of finance, Dr. Adam Aiken, to help me out. “Market liquidity is the ability to buy or, more importantly, sell an asset without materially affecting the price,” Aiken explained. “So the stock market is considered ‘liquid’ since you can, generally speaking, sell a stock without causing the price to drop dramatically.”

“Now, how might working remotely affect market liquidity?” asked Aiken. “Trading has historically been done on ‘trading desks,’ where traders at the same firm can talk to each other quickly, where they can quickly call a trader at another firm, and where they can use chat programs to discuss the markets … It could be that working remotely speeds up the transition to computer trading.”

“As for the future of remote work,” Aiken said. “I'd be surprised, though, if a large number of employees at the big financial firms started working remotely all of the time.”

Milstein, however, thinks that there will be a trend towards working from home, even from larger businesses, once social distancing is no longer necessary.

“Most firms realized they can do a lot of what they do from home,” he said. “And I think it’s going to benefit a lot of people—you know, working moms and dads who have young kids—where they can maybe work half the time in the office and half at home and still do their job 100 percent.”

The future of the industry is a hot topic as the New York Stock Exchange has now opened and stay-at-home orders have started to alleviate.

There’s a lot to think about before big Wall Street firms will open up their offices for business again. Crowded elevators for one are a concern, as they don’t expect people to walk up the stairs to upper levels of a skyscraper. Commuting methods are also being considered as many people use public transport to get to work. One way or another, my dad cannot wait to get out of our basement and back to the office.