"In equity derivatives, there is flow trading in very standardised contracts, and there are the more complex structured products.
"In flow, you are making money from commissions on the trades you make for clients.
Right now it's very hard to make any money in flow trading, let alone rip clients off. As I said, the contracts for equity derivatives are completely standardised and transparent, publicly traded on the exchange.Please note that it is hard to rip clients off with a standardized, transparent financial product.
Clients can get the product from 10, 15 market makers at a bank or brokerage firm, so they play us off against each other.
"There are some really big hedge funds out there, and in the current market, they can get very good prices.
"As for the more complex, structured products … There is now an incredible legal and compliance framework you have to work through.
Clients got severely burnt in the sub-prime crisis and with the Lehman default, when their complex structured products blew up in their faces.
So right now, the less complicated a product is, the more their appetite. It's all about counter party risk and transparency.