BY URSULA MILLER
The Cincinnati Enquirer
One of Cincinnati's three day-trading firms, Block Trading, has closed after just nine months in business.
The closing, not of Block specifically, but of one of the three, appeared a foregone conclusion given the struggle local proponents of day trading have had filling their available seats.
"We weren't seeing the market we wanted to see, the number of people," Rick Swope, manager of the former Block Trading office at the Bank One Towers near Kenwood Towne Centre, said this week. Cincinnati is one of the few cities its size to host several day-trading firms. The relatively small population base combined with Cincinnati's conservative culture have made it challenging to find enough successful traders.
A challenge insurmountable to Block, perhaps. But the other two local firms continue their quest.
"Phenomenally well" was how Mitch Shapiro, managing director of Generic Trading Associates, downtown, described the status of his office. His was the first to open in Greater Cincinnati, in late 1996.
Block was the second. It opened in June 1997.
The closing of Block's office March 31 came two months after Glen Trematore opened a Bright Trading branch in Blue Ash, what was then the area's third day-trading shop.
Day trading was spawned in the early 1990s by technological advances that enable traders to buy and sell stock away from the floors of the exchanges in New York, Chicago and elsewhere via sophisticated computer networks.
Dozens of firms, based in New York and other major U.S. cities, have opened branch offices in the last couple of years. A number of shops also have closed in the past year after legions of traders discovered that the lure of getting rich quickly wasn't so easy. Generic has had its ups and downs, Mr. Shapiro acknowledged. But he said the office is now consistently profitable. It has two dozen active accounts and is considering expanding, he said.
Mr. Trematore wasn't immediately available for comment Thursday. Mr. Shapiro said he and his investors recouped their initial investment several months ago, though he declined to specify when. In the past, some months were profitable, some weren't, he said. He wouldn't disclose revenue or profit.
Mr. Shapiro said the key to his office's staying power is its training program and easygoing approach to recruitment.
But the real turning point for the office was when he hired his most recent director of trading, who also had exchange floor experience, Mr. Shapiro said.
Jay Becker, a former trader at the Chicago Board Options Exchange and the Chicago Board of Trade, took Mr. Trematore's place as director of trading at Generic. Mr. Trematore, a former, longtime stock broker, left Generic to start the Bright Trading office.
Proponents of day trading say individuals can be successful, regardless of whether they have previous professional investment experience. Day traders buy and sell stock in rapid-fire succession, profiting on fractions of a point change in a stock's price.
But Messrs. Swope and Shapiro say it is essential to have a core group of experienced, successful traders for an office to succeed. Neither Mr. Swope nor Mr. Shapiro had previous professional investment experience.
But Mr. Shapiro found previous traders to shepherd his flock of newcomers. Mr. Swope wasn't as fortunate.
Cincinnati has virtually no supply of traders with experience on one of the major exchanges.
Generic's first director of trading also was a former trader from the Chicago pits, though he quit day trading to pursue other investment-related business opportunities within a few months of joining Generic.
