BMO Nesbitt Burns is considering establishing an equity derivatives presence in Europe and possibly Asia, depending on the success of its newly created U.S. equity derivatives proprietary trading operation in New York. Patrick Cronin, executive managing director and co-head of equity derivatives, told DW the firm is expanding because its Toronto-based client and proprietary equity derivatives group has generated positive returns on a consistent basis and it is ready to look at new markets. "We have solidified our position in our home market," he added.
Cronin declined to put a time frame on the expansion, explaining that the firm will use the performance of its recently established New York equity derivatives team as an indicator. "It really depends on how quickly things can develop with the new team," he continued. BMO last week hired a six-strong team from Commerzbank to launch its New York operation. Although Commerzbank is not considered a top-tier equity derivatives house in the U.S., one market official said BMO is an innovative house and it is likely to succeed.
The Canadian firm's ambition is to become a global equity derivatives player in index and statistical arbitrage trading plus convertible bond arbitrage, equity options and risk arbitrage, Cronin outlined. It aims to stay within its product focus and will not go head-to-head with global financial institutions, he noted.
Cronin explained that the firm's entry into the New York market has been in the works for about a year. The group will be headed by Steven Lau, managing director, U.S. equity derivatives.
