A bit more about Goldman Sachs' prop trading

Revisiting the glory days of Goldman Sachs' proprietary trading prowess, the firm made more than $100 million in trading revenue on a record 34 separate days during the first quarter. That was up from the then-record 28 in the quarter a year ago, reports Bloomberg. In the quarter, it lost money on only 8 days. Recall that trading and principal investments contributed 61 percent of revenue in the first quarter, up from 59 percent in the first quarter of 2008.

We've noted that the bank, despite its new bank charter, seems bent on being a trading powerhouse. Despite a lot of chatter, we've seen little in the way of Goldman becoming a deposit taking force, which is what others, notably Morgan Stanley, seems to be doing. Will these kinds of numbers last? It depends. Spreads are higher than they've been in some time--lower rates and fewer massive proprietary traders. It may be that it ends up competing with the proprietary arms of smaller, less well-known, high-frequency outfits.

For more:
- here's the Bloomberg article

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