Former Morgan Stanley trader Rob Huntington, who was reported to have made more than $7 million in profits for the investment house this year, is said to be looking for a new job.

Mr. Huntington is considered a star trader specializing in intermediate- term mortgage securities; he is reported to have resigned from Morgan Stanley last week because of personality clashes with management.

Sources also said that Mr. Huntington may have wanted to trade larger positions but that Morgan Stanley was hesitant to invest more capital in pass-through trading. Morgan Stanley declined to comment on a report of Mr. Huntington's departure, and he could not be reached.

Someone with Mr. Huntington's experience and contacts is expected to have no trouble finding a new job, and top traders are generally offered advance contracts for millions of dollars a year.

But the departure of a high-profile trader from a major firm underscores the difficulty of the current trading environment. The flat yield curve creates "a hard environment to trade in, so there's been a lot of movement of traders lately," one source said.

"It's much more difficult now to find value and get transactions done," said Shubh Saumya, engagement manager in the securities practice at the Mitchell Madison Group.

To make profits Wall Street firms need a huge distribution machine to capture income from the difference between the bid and asked prices on each security, or they need people who know how to find "value"-offerings available at low prices.

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Capstead Mortgage Corp. has repositioned its mortgage securities portfolio to improve performance in the event of a long-term decline in interest rates, the company said last week.

The Dallas mortgage banker, with assets of $10 billion, sold all of its $977 million investment in interest-only securities, $659 million of its Fannie Mae and Freddie Mac adjustable-rate mortgage securities, and $656 million of its Ginnie Mae ARM securities.

The sale of these positions produced losses of nearly $255 million, the company said. It also said it expects to take an impairment charge of nearly $45 million in the second quarter on its mortgage servicing portfolio because of prospectively high mortgage prepayments. The $45 million charge is expected to reduce total stockholder equity to $705 million at June 30, from $857 million at March 31, the company said.

Capstead has not replaced the mortgage securities sold, and it expects to sell $1.1 billion of fixed-rate securities, realizing some gains, to reduce its total assets because of the lower level of stockholder equity.

On Friday Capstead's stock price fell $3.626 a share, to $9.312. Last Sept. 17, it reached its 52-week high of $27.6875. At midday Monday the stock was trading at $8.8125.

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