Day Trading, back office to Hedge Fund

Hello Everyone,

I am just about to graduate with my MBA from a decent state school on the west coast. I was wondering how to become a successful day trader on the side while I try to break into the finance industry. My plan is to find a low-level back office job and eventually move my way up and create my own hedge fund.

I don't have that much money, but I figure I can use some of my student loans to experiment. I have a strong interest in option trading and I heard you can make big returns on those.

Let me know what you guys think.

 

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I go to a very popular state school with a lot of students. I am near the top of my class with very little grade inflation. I'm definitely going to trade on the side while I work full-time in the back office. I will most likely pursue my CFA and start a hedge fund. There are many doubters, but so far I have proven them wrong.

 
Best Response

you need to understand something, we get kids on here every week asking how to make money trading, or for advice on how to start their own hedge fund, and none of them ever come back. why? because so many people lose their asses trading the way they're talking about, it's just not a smart thing to do.

so yes, excuse me if you become the next george soros, I was wrong. but the history of WSO tells otherwise, and sometimes a little sarcasm will help prevent a 20-something from blowing himself up financially.

you want to learn how to day trade options? read books, use the internet (but not this forum), try it yourself. if you don't understand how options work, you could potentially put yourself in a very bad spot financially. one way to kill it is by selling naked puts (you get the most leverage and highest potential return), but you run serious risk of going bankrupt. some firms may not even allow you to write naked puts if you don't have enough assets with them.

if I were in your shoes, I'd try to get the best possible job I could after graduation, where you're very likely to have financial success, as opposed to getting a shitty job on purpose, for the possibility of having financial success.

think about the downside: you intentionally put a turd (low end back office job) on your resume, and day trading fails. what's your next move? you already have an MBA, do you really think it's that easy to recruit post MBA if your job wasn't great to begin with?

 
MaverickTrader:
I'm definitely going to trade on the side while I work full-time in the back office. I will most likely pursue my CFA and start a hedge fund.
If you're not going to even consider changing your course of action, then why even ask the question?
MaverickTrader:
There are many doubters, but so far I have proven them wrong.
How so? By getting a back office job? You said even that was just a plan at this point.

It seems to me the only people you've proven wrong are the believers.

 

Your entire story paints a picture of someone incapable of making risk weighted decisions. You pursued an MBA—for who knows how much—only to focus on a career, with a low ROI, that you could attain without the degree. From a business perspective, which is what trading is—what the fuck are you thinking? Having a “strong interest” in options trading, doesn’t translate into extracting profits from sophisticated financial products, and funding your “experiment” with student loans is a horrible idea.

 
ArcherVice:

You're entire story paints a picture of someone incapable of making risk weighted decisions. You pursued an MBA--for who knows how much--only to focus on a career, with a low ROI, that you could attain without the degree. From a business perspective, which is what trading is--what the fuck are you thinking? Having a "strong interest" in options trading, doesn't translate into extracting profits from sophisticated financial products, and funding your "experiment" with student loans is a horrible idea.

Could not agree more.
 

I'm an all or nothing maverick. Either I'm going to make it big or die trying. People think that a back office job is easy to get, but it's really not. Many finance students are struggling to find any job. I took the risk of getting my MBA, and now it's starting to pay off. I need to find a way to move from back office to trading and HF.

 

I love it when people ask questions and then get answers from industry professionals...only to argue with them.

it seems to me you don't really want advice, you want someone to pat you on the back and tell you that what you're doing is smart. well, I think you know how people feel about your course of action, but I suppose you'll have the last laugh if you prove us wrong.

good luck

 

How do we know you or anyone else here is an industry "professional"? It's easy to just take the "conventional" route and bash on anyone who doesn't fit into your box. If everyone took the conventional route, would that result in the same outcome?

 

if someone has a star next to their name, they are who they say they are. the admins of this forum have seen our linkedin profiles, business cards, and so on. I'm not claiming I'm the most experienced person here, in fact I'm far from it. at the same time, I wonder why you even asked for advice in the first place if you already had your mind made up.

and I'm not bashing you, I'm saying that I think what you're suggesting is foolish and not a good use of your time. on the flip side, if you're graduating next month it's a bit too late, so I could be wrong. you asked for advice, and got it. sorry if it wasn't what you wanted to hear, but that's life bro.

 
MaverickTrader:

How do we know you or anyone else here is an industry "professional"? It's easy to just take the "conventional" route and bash on anyone who doesn't fit into your box. If everyone took the conventional route, would that result in the same outcome?

You're talking about gambling your savings. This is what it is called when you have no experience and no edge. Losing money will be your reality with a high degree of certainty.

You are graduating from an MBA program and are somehow heading to the back office.

Don't take any advice, you obviously know better than everyone else given your monumental success so far in life.

 

I was about to offer help from my experiences but I'm not sure you are serious. Trading isn't something you can easily do "on the side". It takes a lot of discipline and good judgement and the standard wiping of one or two accounts. Are you prepared to lose the little monies you have?

Absolute truths don't exist... celebrated opinions do.
 

I'll give you some advice: find a back office job and work your way up to the trading desk. That is what I did. If it is a good Long Only or HF you will learn a great deal about trading, the markets and the industry. It is not what you think it is, heed the above posters advice, do not borrow money to try to trade for yourself. It takes traders many years to learn how to be successful. Starting your own fund takes a lot more than being a successful trader, relationships, connections ability to raise money, etc..

Good luck.

 

Sure, i went to a mediocre school, had average grades, got a unrelated major. Eventually, I got a job at long only growth fund in the back office making $40k. The funds performance started to tank soon after, the AUM went out the door and I was laid off, along with everyone else. Spun my wheels for a while, until I landed a temp job at a bond fund in their back office. An opportunity came up at a value shop and I jumped ship and started as a trading assistant, slowly worked up to junior trader, then trader, then senior trader. Life was good. Until, the performance tanked all the AUM went out the door, comp was cut and....laid off again... I was extremely fortunate to have been pushed off a sinking ship and landed on a soaring rocket ship, my current seat at a hedgie. It took me many years with ups and downs to get where I am today. I owe my success to not giving up, finding a niche, and a whole lot of luck by being at the right place at the right time...

There is nothing wrong with your ambition and enthusiasm, channel it wisely, but this business can be brutal on people, emotionally and physically, in addition to being lucrative...

 

You know, I was sort of in your shoes before finding out about WSO, and having messaged a lot of people on here (including you Dick), they have helped me tremendously in terms of advice, career opportunities and futuristic (realistic) goals. I would not bash anyone on here, and you, having a lot of these senior WSO people WHO ACTUALLY HAS INDUSTRY EXPERIENCE giving you proper advice, should take it into consideration. They have no moral obligations to anyone besides themselves/family, they are providing advice so you don't end up homeless and on the streets from a bad financial outcome.

You bashing them ruins your credibility, sorry to say it that way. I would take Dick's advice strongly, as well as the members (if you bother listening at all) that is providing the reality of the situation.

You want to go into trading? Do it like me (as well as many others). Finishing an MBA does not provide anything, either. Find and join a reputable firm or trading assistant role that does not require any capital contribution and they teach you how to. There are books and resources for less than $50 that gives you instructional vocabulary on what trading is. A lot of the places I have spoken to and e-mailed over, actually likes my technical/engineering background because of the technology being utilized for quants.

Baby steps.

 

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