The pros and cons of being a trader on the west coast

Trading on the West Coast

“Go west, young people” might have been reasonable advice in the mid-19th century, but is it still valid for 21st century traders? Technological advances have made the competitive environment fairer, so that traders can use laptops to trade on California beaches as easily as trading on the trading desk in the Manhattan office. Nonetheless, when trading on the west coast of North America, the region has certain advantages and disadvantages.

Key points

  • West Coast traders may have time for more leisure activities, as their working day can end as early as 1pm
  • West Coast traders are closer to Silicon Valley technology companies that are reshaping the economy and time zones are more in line with Asian market times.
  • West Coast high-frequency traders are disadvantaged due to their geographic distance from large East Coast exchanges such as the New York Stock Exchange and Nasdaq.

advantage

Better work-life balance

Compared with the harsh environment of the East Coast, the laid-back atmosphere of the West Coast brings a better work-life balance for traders. In addition to avoiding pinstripe suits and Wingtips and choosing khakis and loafers, West Coast merchants may still have time for more leisure activities, as their workdays can end as early as 1 pm (the equivalent of afternoon on the East Coast). 4 o’clock). The end of get off work is relatively early, and there is enough time in the day for fun activities, such as picking up children from school, exercising, playing golf, and barbecue dinner for the family. On the downside, West Coast traders must also go to bed early, but this is not necessarily a bad thing. After all, Benjamin Franklin said that early to bed and early to rise make a person healthy, wealthy, and wise. However, traders on the East Coast may not think so.

Higher quality of life

Young cities on the west coast also offer a higher quality of life than cities on the east coast. To prove this, we turned to the consulting company Mercer’s annual “quality of life” ranking, which covers 230 cities around the world. These cities rank the quality of life based on a series of factors, which are divided into 10 categories-from economic environment and housing to entertainment and school systems. In the 2019 ranking, San Francisco ranked 34th, while New York ranked 44th. Vancouver-a thriving city on the west coast of Canada-is the highest ranked city in North America, ranking third; Toronto (in eastern Canada, if not on the east coast) ranks 16th.A city that provides a higher quality of life and better work-life balance can reduce the stress of living in a big city, which is an important consideration for traders, because their occupation is usually associated with increased stress levels.

Close to Silicon Valley

Traders on the West Coast are geographically closer to Silicon Valley than their counterparts on the East Coast. Silicon Valley companies are not only reshaping the United States, but also reshaping the global economy. Disruptive technologies pioneered by companies such as Apple (AAPL), Google (GOOG), Microsoft (MSFT) and Amazon (AMZN) have made these companies the world’s largest companies (by market capitalization) within a few decades. The West Coast of the United States may not have the big brokers and investment bankers like the East Coast, but it leads the country in wealth creation, innovation, venture capital and entrepreneurship. These features may not bring any tangible benefits to traders in the short term. However, in the long run, large-scale wealth creation should generate a large amount of demand for financial services such as wealth management and trading.

Time difference is more suitable for trading in Asia

Curiously, the greater time difference between the West Coast and Asia is beneficial to the West Coast compared to the time difference between the East Coast and Asia. For example, Tokyo is one of the largest foreign exchange and Japanese stock trading centers. The Tokyo Stock Exchange is open from 9 a.m. to 3 p.m. Japan Standard Time; this means one day in advance in New York from 8 p.m. to 2 a.m., and in San Francisco from 5 p.m. to 11 p.m. Therefore, traders will find it more convenient to trade in the Tokyo market in San Francisco than in New York. Although New York traders have an advantage when trading London and other European financial centers because the time difference is only five or six hours, the time difference between the influential Asian financial centers Shanghai, Singapore, Hong Kong and Mumbai and the West Coast is effective for the future. Those are favorable.

shortcoming

Stay away from the center of trading behavior

Let’s face it; transactions in New York and Toronto dwarf those in San Francisco and Vancouver, respectively. In addition, technological progress may have leveled the playing field. However, they also allow major participants such as high-frequency trading companies to access stock prices within a fraction of a second before the other investing public through hosting. This is the practice of physically placing their computers as close as possible. . Go to the computer server of the exchange as much as possible. For West Coast companies thousands of kilometers from the center of operations, these strategies are impossible.

Career prospects may be limited

Currently, trader career opportunities in cities such as San Francisco and Vancouver are limited, while job vacancies in traditional financial centers such as New York and Toronto are the opposite, as the trade and financial markets in the large east coast cities are growing exponentially. Service company. As West Coast trading companies benefit from the surge in Silicon Valley, this situation may change in the next few years.

Wake up in otherworldly time

West Coast traders must stand in front of the trading desk at 6:30 a.m. to prepare for the opening of the New York Stock Exchange (NYSE) market at 9:30 a.m. Eastern time-which means waking up at 4 a.m. Catch up on the news, listen to conference calls and commute to work.

The cost of living may be higher

Because cities such as Vancouver and San Francisco have always been among the most desirable cities to live in, the cost of living in these places may be higher than on the East Coast, mainly due to soaring real estate values ​​and limited rental units.

Bottom line

At the end of the trading day, West Coast traders gained a better work-life balance and quality of life, but gave up some career prospects and opportunities to become the center of trading activities. Whether this trade-off is worthwhile is purely a matter of personal choice.

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