The Swiss bank UBS has decided the place that needs trimming to bring profits up is their automated options market-making division. Other parts of their options trading arm will remain unchanged. Staff who was engaged in the auto options section will be re-assigned to other parts of the bank which have been more profitable to the company as a whole.
The move comes at a time when other banks are cutting back on costs and risk. The general reassessment is a reaction to the financial crisis which has led several of the world’s largest banks to leave areas of trading that were simply too expensive to make them worthwhile, or simply were not market leaders in those areas.
“Being a liquidity provider in the options market has become more difficult as market makers are stressed with greater regulatory responsibilities and a fragmented exchange structure,” said Ed Boyle, CEO of BOX Options Market.