Today’s Junk-Bond Trader Is a Shell of Former Swashbuckling Self
- "If you’re a risk-taker, you’re thinking, ’My hands are tied’"
- It’s up to asset managers to fix liquidity issues: Tabb Group
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They used to be some of the savviest people on Wall Street. Maybe they still are, but these days pretty much all junk-bond traders need to do their jobs is a decent list of contacts.
They don’t have to deploy deep analytical skills nearly as often to figure out whether to buy millions of dollars of high-yield bonds and hang onto them for a while, or flip some fast. In 2015, about 70 percent of the time a major bank traded a high-yield bond, it was doing no more than linking up a buyer and a seller, according to a recent estimate from the consulting firm Tabb Group LLC. A decade ago, the figure was 20 percent.