For today’s sell-side trader, the value of a trading turret is not so much in specialized technology but as a simple, easy-to-use and robust office phone. Internal messages and client orders can be easily communicated through instant messaging, which in some ways eliminates the need for a high-end technologically-advanced phone.
Additionally, as most traders prefer a separate physical phone to an IP soft phone on the computer, the trading turret won’t be phased out anytime soon. In part this is because old habits die hard, but there is more to it than that. Screen real estate is scarce for traders, even for those with four or more monitors. Bloomberg, an OMS, an EMS, analytical tools, Outlook and a variety of other internal applications quickly take up all available pixels. That being the case, it’s unlikely that the turret will be replaced by a soft phone anytime soon. Logistics aside, IP phone technology is also considered less reliable than a direct line connection, and thus some traders also value the ability of a trading turret to connect directly with a carrier’s dial tone.
But this is all changing.
With the myriad tools available for communication to the modern sell-side trader, the trading turret will evolve to be a critical tool for client management. For high touch executions, support and trust in broker relationships, coupled with timely information on market color and relevant research, are essential. Thus, traders need trading turrets to be integrated with their existing computer software in a way that ensures efficient communications.
Ideally, a sell-side trader can look at his or her order flow on the OMS, look at a specific order and be able to directly dial the client with video on the trading turret through the desktop. Many traders today would like to see their trading turrets integrated with Outlook to dial directly using the computer, saving time in an environment in which seconds matter. Based on recent TABB Group conversations with the sell side, integrated video is also in high demand for next generation trading turrets. Now that trading relationships span across the globe, the ability to see facial expressions and gestures adds much more value to the sell-side trader.
For many people on the sell-side today, it’s back to basics – the need for a robust, yet easy-to-use trading turret (albeit in the future, with video capability). While hardware replacements at major investment banks are infrequent and done every decade or so, there’s still an opportunity for a more robust trading turret. This can be achieved through improved turret software that integrates the turret with existing computer tools, and has a focus on client management.
IPC’s IQ/IMPACT software takes a step in this direction, offering an interface that integrates the turret functionality with PC applications and the firm’s CRM system. The key is developing a software solution that easily blends into a trader’s existing workflow and makes it more efficient.
In other words, it’s not quite time to write off the trading turret. Rather, the turret has the potential to be the communications hub that helps high-touch traders drive client business.