But… just because this one guy is doing an MBA doesn’t mean that it has positive NPV. Plus, is the company paying for this?
ohai Wrote: ------------------------------------------------------- > But… just because this one guy is doing an MBA > doesn’t mean that it has positive NPV. Plus, is > the company paying for this? Positive NPV is a less restrictive constraint than opportunity cost.
Why would you not include opportunity cost in the NPV?
ohai Wrote: ------------------------------------------------------- > Why would you not include opportunity cost in the > NPV? You would. Nonetheless, even if the NPV is positive you may not want to pursue that course of action.
Question to the traders… Graduated with an undergrad in econ in '08 (top Canadian school - honours). Have been working at a University endowment and pension for 2 years where we outsource management and basically work on the day to day needs of three separate portfolios (investment performance measurement, manager selection, investment policy statements, cash management, rebalanceing, etc…) I also spent a year in a role where I did the trading for a retail broker who had a “high volume” book of clients - basically clients who traded daily, but not in huge quantities). I want to get a position on a desk as a trading associate. What’s the best way to approach this? Is this a common move/is there a way I can leverage the skills I have gained at my current job? I REALLY appreciate any constructive responses. Cheers
the bank sales and trading rotationals normally recruit right out of school. the love the east coast schools and you would be the most prepared coming out of them. With ur undergrad and experience you would get an interview, rest is up to you if you do not want to go back to school, i know its cliche but you will have to start networking. what kind of trading do oyu want to do?
Superior, Thanks for the post. That seems to be the consensus. The good thing is I have a pretty extensive network given the composition of the University’s board, but there just seems to be next to no jobs on any trading floors…so, I make great HR contacts through my network and get put on the list of, “we’ll call you when something comes up”. There’s a lot of people who ask the hiring managers out for coffee, etc…so they hear my story from anyone who is serious about getting on a trading floor. I plan on doing my MBA, but want to put L2 (this June) and L3 behind me first. If I could afford to be picky about what I trade, I think that I would choose North American equities. In all honesty though, seeing as at the time openings are wherever someone leaves or a small group is expanding, I would be just as happy trading fixed income - I actually find bonds (and futures for hedging) pretty interesting. Money market/treasury not my bag, but OTC stuff like swaps or options (OTC or exchange traded) would also be great. I guess I just keep networking, keeping in touch with the HR dept. at the firms I have talked to etc…?
Don’t forget to point out that you actively trade your own money. If you don’t trade your own money btw, you won’t get through any trading interview. This will give you some (very basic) experience, but will also enable you to answer some market questions, and you can talk about good and bad trades you’ve made, and why.
justin88 Wrote: ------------------------------------------------------- > Don’t forget to point out that you actively trade > your own money. If you don’t trade your own money > btw, you won’t get through any trading interview. > > This will give you some (very basic) experience, > but will also enable you to answer some market > questions, and you can talk about good and bad > trades you’ve made, and why. But be careful with this strategy. You must be trading decent amount as compared to your net worth (which isn’t much harder to estimate for traders). If somehow they got convinced that you lack the discipline, you are straight out! Discipline is highly sought after in trading, so when you plan to do this follow proper discipline with decent amount of money (otherwise you won’t give shit to discipline). It’s the same reason they prefer raw talent, because they can teach him trading with discipline. It’s damn hard to make someone unlearn something then make him learn something, so if you trade, do it with advice of actual traders. DO NOT try learning trading by yourself if you have someone to guide you. Trading is not about complexity, it’s discipline, some of best traders just use covered calls and execute it again and again and again and again and again and again… with discipline, so in your p/l statement you should not look like a hooker who went away with anything for any bit of money! I’m also trying my best to break into trading floor so these are just my observations based on my interaction with traders.
And yes, read as much macro, TA and Behavioural finance papers… as much you can. That’s the only prep IMO!
Trading your own money might be a plus, but I doubt that it will be the definitive factor in your job search success. Also, different kinds of trading desks look for different sorts of qualities in their applicants. If you apply for jobs at a derivatives desk (options, swaps, etc.), for instance, it’s unlikely that they will hold much value in technical analysis. Instead, they will expect a solid understanding of pricing concepts and mathematical ability. In fact, most trading desks support flow businesses and try to *reduce* risk. So, it might not be a good idea to approach these guys claiming prowess in making directional bets on the market. So, my input might be somewhat obvious, but you really need to research the specific kind of desks at which you are applying for jobs. They might not expect you to have a lot of knowledge (and it would probably not be a good idea to claim that you do). However, they will look for attitude and talent that will enable you to eventually become a good trader. In any case, good luck, and the earlier in your career you start, the better.
ohai Wrote: ------------------------------------------------------- > If you apply for > jobs at a derivatives desk (options, swaps, etc.), > for instance, it’s unlikely that they will hold > much value in technical analysis. Instead, they > will expect a solid understanding of pricing > concepts and mathematical ability. In fact, most > trading desks support flow businesses and try to > *reduce* risk. So, it might not be a good idea to > approach these guys claiming prowess in making > directional bets on the market. Those are market makers, they really don’t “trade” or make directional bets. Whatever contract the Sales Desk has begged, Structuring Desk has structured and Quants have priced… the trader had to place that order in market. From that point onwards what he needs to do is to hedge it, so they are 0 net p/l after making some money from premium and hedging cost differential. Those traders are hedgers, there responsibility is to ensure 0 p/l once the profit is locked, done. If you want to be that kind of trader (basically market maker), then MFE is currently in fashion there.
For all other kind of “derivative trading”… derivative contracts are used to enhance the risk/return tradeoff, ultimately it’s your ability to make directional bet on underlying… and it’s not that difficult to understand all derivative contracts for trading purpose (because ultimately quants will price it), though there are some really complex ones… like Power Reverse Dual Currency Swap where it’s hard to figure out easily that who will win in what case, but I doubt anyone else then hedgers/market makes use that kinda things!
What is this I don’t even… What do you do for a living again?
Thanks for the input guys. Ohai, do you trade as a profession?
Yes.
ohai Wrote: ------------------------------------------------------- > Trading your own money might be a plus, but I > doubt that it will be the definitive factor in > your job search success. Also, different kinds of > trading desks look for different sorts of > qualities in their applicants. If you apply for > jobs at a derivatives desk (options, swaps, etc.), > for instance, it’s unlikely that they will hold > much value in technical analysis. Instead, they > will expect a solid understanding of pricing > concepts and mathematical ability. In fact, most > trading desks support flow businesses and try to > *reduce* risk. So, it might not be a good idea to > approach these guys claiming prowess in making > directional bets on the market. This is good advice for the sell-side. For the buy side, you probably want to say something different. As ohai says, tailor your talk based on the particular job/desk/fund.
ohai Wrote: ------------------------------------------------------- > What is this I don’t even… I was just adding further explanation to your point, that there are two types of traders, those who bet, and those who hedge. > What do you do for a living again? Worked as a Quant. Not in finance for now, though I trade for fun, gives me kick.