Goldman Sachs traders got lucrative and boring

efinancialcareers.com:

One reason why Goldman Sachs made its ill-fated move into «platform businesses» that were supposed to generate a steady flow of income for minimal incremental effort was that its lucrative sales and trading business was seen as being too erratic. The firm's latest 10Q filing today, says times have changed. 

Get Morning Coffee  ☕  in your inbox. Sign up here.

Distribution of profits and loses in Goldman Sachs' trading business by number of days, 2023-2024*

*Frequency distribution of daily net revenues for positions included in VAR calculations 

Source: Goldman Sachs

Goldman Sachs' traders not only had zero loss making days in the entirety of the first half of 2024, but their profit-making days were clustered above $50m. 

This seems to be a pattern that endures: the distribution of Goldman's loss and profit making days in the first half of 2024 looks very similar to the distribution of those days in the first half of 2023, particularly at the top end. 

Things were not always thus. If you look back to five years ago (in the chart below), not only were Goldman Sachs' trading days clustered in the low range, but the year-on-year variance in their distribution was more dramatic. 

Distribution of profits and loses in Goldman Sachs' trading business by number of days, 2018-2019*

*Frequency distribution of daily net revenues for positions included in VAR calculations 

Source: Goldman Sachs

What changed? Clearly, the market. In its most recent 10Q, Goldman notes that volatility is down. Other banks have benefitted too: Bank of America also had no loss making days in the first half of 2024, and had more than 25 days when it made more than $50m. 

But BofA's big trading days were 14 fewer than Goldman's 39, and were less