Trading on the West Coast: Advantages & Disadvantages
Trading on the West Coast offers a better work-life balance, higher quality of life, proximity to Silicon Valley, and favorable time differences for trading in Asia. However, it may involve being away from the epicenter of trading action, limited career prospects, early waking hours, and a higher cost of living.
In the 21st century, trading has become a technologically driven endeavor that transcends geographical boundaries. Traders can execute transactions from the picturesque beaches of California, mirroring the hustle of Wall Street. Despite this flexibility, trading on the West Coast of North America presents unique advantages and drawbacks worth considering.
Advantages & Disadvantages
- Proximity to Silicon Valley
Geographically, West Coast traders are much closer to the epicenter of technological innovation, Silicon Valley. Industry giants like Apple, Google, Microsoft, and Amazon have transformed into market leaders within a few decades. Although this proximity may not yield immediate benefits, it positions West Coast traders for potential long-term gains as wealth creation fuels demand for financial services.
- Higher Quality of Life
West Coast cities offer a superior quality of life compared to their Eastern counterparts. Mercer's "Quality of Living" rankings for 2019 place San Francisco at 34, ahead of New York at 44. Vancouver, a burgeoning city on Canada's West Coast, claimed the third spot in North America. A higher quality of life reduces the stress inherent to big cities, a critical factor for traders accustomed to high-pressure environments.
- Time Difference Favors Asian Trading
Interestingly, the greater time difference between the West Coast and Asia compared to the East Coast works to the West Coast's advantage. For instance, trading foreign exchange and Japanese stocks in Tokyo, which operates from 9 a.m. to 3 p.m. Japan Standard Time, is more convenient from San Francisco (5 p.m. to 11 p.m.) than from New York (8 p.m. to 2 a.m.). While New York traders excel in European markets due to a smaller time difference, the West Coast prevails in dealings with influential Asian financial centers.
- Better Work-Life Balance
The West Coast's laid-back atmosphere fosters an improved work-life balance, diverging from the relentless pace of the East Coast. West Coast traders, in their khakis and loafers, often conclude their workday by 1 p.m., affording them ample leisure time. Activities like picking up children from school, exercising, golfing, and family barbecues become feasible. Early bedtimes, inspired by Benjamin Franklin's wisdom, are a tradeoff East Coast traders might not favor.
- Early Riser's Dilemma
West Coast traders must be at their desks by 6:30 a.m. to prepare for the 9:30 a.m. EST opening of the New York Stock Exchange. This means rising at 4 a.m., catching up on news, participating in conference calls, and commuting to work—an early morning ritual not everyone embraces.
- Limited Career Prospects
Presently, career opportunities for traders in San Francisco and Vancouver are fewer compared to the financial powerhouses of New York and Toronto. However, this landscape may change in the future as West Coast trading firms harness the Silicon Valley boom.
- Away from the Epicenter of Trading Action
Trading volumes in San Francisco and Vancouver pale in comparison to New York and Toronto. Technological advancements have leveled the playing field but have also enabled high-frequency trading firms to gain a fraction-of-a-second advantage through co-location, a privilege inaccessible to West Coast firms located thousands of kilometers from the epicenter.
- Higher Cost of Living
Desirable cities like Vancouver and San Francisco consistently rank among the most attractive places to live, which drives up the cost of living. Escalating real estate values and limited rental units contribute to this financial challenge.
|Proximity to Silicon Valley||Early Riser's Dilemma|
|Higher Quality of Life||Limited Career Prospects|
|Time Difference Favors Asian Trading||Away from the Epicenter of Trading Action|
|Better Work-Life Balance||Higher Cost of Living|
Choosing to trade on the West Coast involves a tradeoff: a better work-life balance, higher quality of life, proximity to Silicon Valley, and favorable time differences in exchange for being away from the epicenter of trading action, limited career prospects, early waking hours, and a higher cost of living. Ultimately, the decision hinges on individual priorities and preferences.