Restless quants with skills in high frequency trading can profitably explore new career opportunities in South Korea.
Heejin Kim filed this report for Bloomberg:
All the way from Sydney, Star Beta in February set up one of the very few — if not the only one — independent proprietary trading shops of the South Korean capital. It has already hired 16 traders, with a goal to employ 30 in total.
While banks often have prop-trading desks, which typically use leverage and trade with their own money, independent firms are rare in Korea as platforms such as high-frequency trading aren’t developed there yet, according to NH Investment & Securities.
“Many prop-trading firms in the U.S. or Europe are specializing in systematic trading, like high-frequency trading, while South Korean traders are lacking in know-hows in that technology,” said Gilbert Choi, a derivatives analyst at NH. “In Asia, Australia has some prop firms as there is European and U.S. capital invested.”
Sydney-based Star Beta, whose traders handle futures of all kinds of assets — including cryptocurrency — is seeking to nurture the growth of a professional trading community in Korea, a market where retail investors used to dominate, said Mark Zagora, its chief executive officer.
“The fact that Korea hadn’t had a prop shop was a reason for us to pioneer the industry,” said Ki Shin, the chief executive officer of Star Beta’s Korean office. The firm trains applicants for three months, with their compensation based on their profits and split equally between them and the company.
The Financial Services Commission, Korea’s top financial policy-making body, has been seeking to revive the nation’s derivatives market, which used to be one of the world’s most active but suffered after new rules emerged in 2011 to help curb speculation. It said in May it will ease some of the regulations to lure back local traders, including retail investors who accounted for more than half of the trades in Kospi 200 Index futures and options in the early 2000s.