The End of a Daytrader's Rope: Can Firms Cope?

The Atlanta shooting is making daytrading firms think twice about how to help their clients deal with the vagaries of the market.
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It sounds like the last word in freedom: Quit your job, swap your gray flannels for khaki shorts and spend your days making your own decisions, trading stocks with your own money, for your own profit. Play golf when the sun shines. Never have a boss again.

But while daytraders may be the ultimate example of free agency -- the growing group of self-employed, temp workers and contractors that new economy cheerleader

Fast Company

magazine says now make up about 16% of the U.S. workforce -- they're never going to have a tension-free work environment.

They're risking their own money, often representing years of accumulated savings, and they likely will lose much of it when they first get started. Many are new to trading and haven't learned how to handle the stress of market fluctuations. And many were spooked after the Internet sector, once a daytrader's highway to heaven, came off its peak earlier this year and started handing them real losses.

On Thursday, this daytrading world was put under the spotlight after Mark Barton allegedly

killed nine people at two daytrading firms in Atlanta.

WXIA-TV

in Atlanta reported that Barton had lost $100,000 or more trading in recent days.

But Barton also had plenty of other problems. He apparently killed his family and was the key suspect in two murders six years ago. In his suicide note, he said he had been dying since October, according to published reports. So it's not as if anyone expects other daytraders to react violently if they lose money.

Because daytraders don't work for "the man," they miss out on The Man's support services, things like wellness programs, counseling and on-site gyms, which come in handy when market-induced stress sets in. The

Merrill Lynch

(MER)

employee assistance program, for example, has five counselors to help stressed-out employees cope with personal or work-related problems.

"It's well used," says Pat Crowley, first vice president of organizational change and wellness. Supervisors are trained to look out for signs of stress in workers and refer them to the EAP program.

For the high-stress world of options trading,

Mercury Trading

boss Jon Najarian says the firm "provides all our traders a membership at a health club in the building."

It comes in handy. "My younger brother trades

America Online

(AOL)

and

Micron Technology

(MU) - Get Report

, both highfliers in the pits. Even though he's a former pro-football player, he's still a workaholic on the lifting machines and Stairmaster," Najarian says. "Lately he's been doing it during the day, because the stress is worse."

Richard Denenberg, co-author of the forthcoming book

The Violence-Prone Workplace

, says that because of the stress of the daytrading world, firms ought to offer counseling or stress-management seminars.

"Companies could say, 'Look, if you're going to be doing this for a long time, you need to learn to cope with the stress of the job,'" he says.

But because daytraders are clients, not employees, firms ultimately have less at stake in the trader's well-being, and limited leeway to do anything. The ultimate threat, if clients seem unusually keyed up: Get some help, or we'll kick you out.

Gary Mednick, president of

On-Site Trading

in Great Neck, N.Y., says the daytrading firm's managers constantly talk to both employees and clients who suffer from big losses or who seem overly stressed.

He estimates his firm turns away 75% to 80% of potential traders because they don't seem suited to the job, and that 10% of traders who do come on are eventually asked to leave.

"It's not necessarily because they've lost money, but because of the way they've handled themselves," he says. While there's no psychological or occupational profile for what makes a good trader, Mednick says people best suited for the job -- in addition to being able to live with no income for the first six months to a year -- have to be able to relax in stressful situations.

"Stress can do some phenomenal things," says Terri Lonier, founder of New Paltz, N.Y.-based

Working Solo

, a publishing and consulting company for solo workers. "Factors in life may coalesce to put you over the edge, and you've got to know yourself well enough to know when you've got a problem."

Mednick at On-Site Trading says he sent out a questionnaire Friday to employee and client traders to gauge how much stress they're under. He's also considering whether to offer counseling or other services to his employees and clients. "Until yesterday, it never crossed my mind," he says.

--

Staff reporter Erin Arvedlund contributed to this report.