CFAMaven Wrote: ------------------------------------------------------- > Excuse me for my ignorance, but is your position > like a stock broker for instituational investors > ? > > And I always thought trading was a high profile > very-lucrative job, is it only for the big > investment banks that trading is a very lucrative > career ? There are different types of trading. The trading you’re alluding to is proprietary trading aka prop trading. On a prop desk, let’s say Goldman Sachs , traders are trading the firms capital to generate profits for the firm. Goldman Sachs has one of the more, if not most, profitable prop desks on the street. Many of the best traders leave to launch or join hedge funds. The majority of the best hedge funds in the world were launched by ex-prop traders. Prop desks trade almost anything. Then there’s institutional trading where traders are simply crossing orders for large clients. ex. If ABC Pension Fund wants to sell $50,000,000 of GOOG and buy $50,000,000 of AAPL they would go through an investment bank’s institutional trading dept. The trader will try to match the order with seller/buyer and then take a fee for their service. Any large investment bank can process these types of trades. Pretty vanilla, they are never trading the firm’s capital. Lastly, we have RIA/Financial Advisory trading. I do this and it sounds like the other previous posters do as well. We have several hundred million dollars under advisement in individual client portfolios at our firm. The PMs decide how the portfolio will be allocated, what will be in it, etc…I am then passed instructions to “trade” the account. I am simply going through our software and placing the trade orders through our custodian for the accounts whether they’re equities, bonds, options, CDs, mutual funds, ETFs, CE Funds, etc… I do it all. It’s really easy but you can easily fuk any simple trade up.
The best trading is taking firm risk. The worst is taking small client risk.
Thanks Chuckrox8 for that excellent explanation!