Jobber

Jobbing, or “scalping” as it is often called in the financial trading world, is a rapid-fire trading style that involves taking advantage of small price discrepancies within very short time frames. The practitioners of this art are known as jobbers. Jobbers are mainly focused on capturing small profits that can accumulate into significant returns over time through a high volume of trades. While jobbing is commonly associated with stock markets, it is also prevalent in other financial markets such as commodities, Forex, and options.

Definition and Role

Jobbers operate under a unique set of rules and exhibit behaviors that differentiate them from other types of traders. They look for highly liquid markets, quick execution times, and low spreads. This trading style is characterized by a large number of trades executed in a single day, with each trade aiming for small price changes. A jobber’s goal is to take advantage of the bid-ask spread or to capitalize on short-term market inefficiencies.

Characteristics of Jobbers

  1. High Frequency: Jobbers might execute hundreds or even thousands of trades in a single day.
  2. Small Price Movements: They aim to profit from minor price fluctuations, often a few cents per share or points in case of indices.
  3. Short Holding Periods: Positions are held for very brief periods, sometimes just seconds or minutes.
  4. Technical Analysis: They rely heavily on technical analysis and charts to time their trades.
  5. Liquidity: A jobber ensures that there is sufficient liquidity to enter and exit trades rapidly without large price impacts.

Tools and Techniques

To excel in jobbing, traders employ a variety of tools and techniques designed to maximize speed and efficiency:

Advanced Trading Platforms

Jobbers require robust, high-speed trading platforms that allow for rapid order execution and provide real-time data. These platforms often feature:

Algorithms and Automation

Many jobbers utilize algorithmic trading to handle the speed and volume of trades. These algorithms scan the market for predefined triggers and execute trades at electronic speeds. Features include:

Technical Indicators

Jobbers often rely on a suite of technical indicators to guide their trades. Some commonly used indicators include:

Market Research

Even though fundamental analysis plays a minimal role in jobbing due to its short-term nature, jobbers keep an eye on market news, economic indicators, and announcements that could impact volatility.

Challenges

Jobbing is not without its challenges and risks. Some of the primary challenges include:

Transaction Costs

The high-frequency nature of jobbing results in a significant number of trades, leading to substantial transaction costs. These can erode overall profitability if not managed correctly.

Slippage

Slippage occurs when there is a difference between the expected price of a trade and the actual executed price. In fast-moving markets, this can be a significant issue for jobbers.

Emotional Stress

The fast-paced environment and the necessity for quick decision-making can lead to significant emotional stress. Jobbers need to maintain a high level of discipline and focus.

Market Access and Technology

Staying competitive as a jobber requires access to the latest technology and market data feeds, which can be costly. Additionally, maintaining a low-latency infrastructure is crucial.

Prominent Jobbers and Firms

Several firms and individuals have carved out a niche in the world of jobbing. Some of the well-known proprietary trading firms that engage in high-frequency jobbing include:

Jane Street

Jane Street is a global proprietary trading firm that specializes in trading ETFs, equities, futures, options, and bonds. Their technology-driven approach and quantitative strategies make them a key player in the jobbing world. Jane Street

Virtu Financial

Virtu Financial is one of the largest electronic market makers in the world. They focus on providing liquidity, executing orders quickly, and leveraging technology for market access. Virtu Financial

DRW Trading

DRW Trading engages in various trading strategies, including high-frequency trading and jobbing. They utilize technology and quantitative research to optimize their trading activities. DRW Trading

Conclusion

Jobbing, though demanding, offers opportunities for traders to capitalize on small price movements within very short time horizons. It requires a unique skill set, access to cutting-edge technology, and the ability to maintain composure under pressure. As markets evolve, so do the tools and techniques used by jobbers, making it a continually advancing field.