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TRADERS Q&A: Citi’s Gately Discusses Return of Vol and Trading These Days

Traders Magazine Online News, March 28, 2018

John D'Antona Jr.

The Citi never sleeps.

And to hear Tim Gately, Citiís U.S. Head of Equities tell it, things have been busy at 388 Greenwich Street aside from a new corporate headquarters facade. In a recent visit to Citi, Gately sat down with Traders Magazineís editor John DíAntona Jr. to discuss the trading markets, whatís new at the bulge bracket bank and market structure issues.

What follows is an edited version of the conversation

Traders Magazine: Is it good to see volatility return to the market?

Tim Gately: Absolutely. We have a good environment for trading now. Volatility creates more opportunity because clients have to be more active in managing their portfolios and understanding changes in the market.† We are there to provide solutions, execution and advice, three things we feel we do pretty well.† So, that works quite well.† It also creates uncertainty and you have to be very disciplined around managing the risks and staying on top of the situations, but that's part of the DNA around here so we've definitely viewed it as a good opportunity for us.

TM: Have you had to comfort investors who might have forgotten what volatility was? Or who havenít really seen much of it?

Gately: To see it peak up is a great thing. But we need to remember that volatility is only around the 14 level here, not particularly high by historical standards. For some investors, this is their first exposure or taste of market volatility. But, the volatility is creating a lot of dialogue, which is always a good thing. Clients are calling and asking what weíre seeing, what's going on, etc.

TM: So, what are you doing to assist clients?

Gately: One of the things we're really seeing now is a pick-up of business in our advisory solutions side. There is certainly a lot of discussion around liquidity and how do you access liquidity in the market. Particularly, as we've seen some decent gaps in relatively short time frames. The ability to monetize that market movement or trade around that is challenging. The markets are still thin, there's no question about that.

TM: Really?

Gately: Yes, relatively speaking, itís still thin, particularly when volatility gaps higher.

TM: We believed the increase in volatility that might have taken care of volumes and boosted them.

Gately:†† Volumes do generally pick up but you also see gaps in prices and retracements which at times allow little opportunity to monetize positions.† You also have to differentiate between index and futures volumes, which tend to spike during volatility, relative to single stock or options.

TM: So, you think the market is strong fundamentally?

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