I haven't networked-am I in trouble?
Been at a BB in derivs trading for 5 years now. As I've gotten more comfortable in my role/started to make a career at the bank I've frankly sort of stopped networking as it hasn't been necessary.
To be entirely honest I'm a lonely sort and most of my friends are outside the industry-and as I haven't looked to leave I've sort of let my industry connections die out.
In a trading role I just don't see the value of networking either. I've interviewed around and especially in this day and age of industry contraction, it's really fit/competence rather than hiring a buddy (or so I think).
Am I seriously remiss to have this attitude?
Sounds like you're just making excuses to not network and be more comfortable - are you naturally extroverted?
I say this because of the "don't see the value in networking" statement you made. Are you really going to be blind to the fact that industry contacts can be useful for reasons other than immediate hiring decisions? They can let you know of openings at their firm, put you in touch with people who can make decisions, and let you know how life is at other firms before you make a jump. There are tons of reasons to make connections.
With that said, I don't think it's ever too late to start building connections. Attend networking events (I'm sure there are some industry/role specific events going on all the time), attend school alumni networking events, start going out more with work colleagues, go to firm specific happy hours / events and talk to people, strike up more conversations in the lunch room. It's incredibly easy and most people are receptive to it as it helps them out as well.
Good luck.
be careful...every BB assigns a value to each market maker seat...this is the amount that an avg competent trader should be able to make from just monetizing client flows. There is NOTHING SPECIAL about hitting this number. In a wave of downsizing, guys who just hit the "value" of a seat are fired, to make room for guys who will make more, by taking more risk.
I've seen this happen. A seat was valued at 8mm/year. Trader made 8mm/year for 4 years. Firm had a wave of layoffs, and the guy making a steady 8mm/year was fired. He was replaced with a more volatile trader who made 20mm his first year, then lost 20mm the next year and then THAT guy was fired. This may not seem like the smartest business decision...but that's exactly what happens.
So, TLDR, network as though you might get fired in the next wave of layoffs...because that might happen to you.
However, if your seat has an assigned value of 8mm, and you consistently make +20mm....then wtf are you doing?? you lazy ass, you should goto a hedge fund to get paid 20% of your PnL, rather than 4-5% that the BB bank pays you. Either way, eventually, being lazy will only be a detriment.
I know that when things are steady, you don't feel the need to rock the boat...but remember, the only constant, is change.
think of networking as a cheap insurance policy in the event of a downsizing / layoff where your bosses boss decides that you can be replaced with a better trader who will make more money in your seat.
When desks have a vacancy and are looking to fill a trading seat, 9 times out of 10, the guy who gets hired has a relationship with the head of the desk who hires him. This is partially why desk heads go out and network so much...but they also do it for themselves...when the person making firing decisions is one step removed (or more...so, your boss's boss's boss)...you just never know when you will get the axe.
The only way to be protected from this cycle is if you are generating large PnL numbers well in excess of the value of the seat...but we are talking about large numbers. If you are making under 20mm PnL a year...you are not safe...i've seen it happen.
Yeah I hear you guys. I had a panic attack haha and sort of misrepresented the situation. I'm very well liked internally especially by sales and have made good friends on the team. It's more that I don't have a big book of friends in the market which I'm hoping won't kill me...
if sales likes you, then its time to get sales to start taking you out to entertain clients...first you should take a list of all your desks customers, then whittle that list down to your top 20 that you would like to work for if you do indeed get layed-of somedayf...and then go out with them to entertain and have fun. Its not all about talking shop...first get them to like you...become their new best friend (this is the networking part...if the customer is single, be his wing man picking up chicks, if a sports fan then goto games and be enthusiastic), and then later, send out prop trade ideas to these customers via the sales force. After a few months of sending out good prop trades, you will be able to call up any of these clients without sales as a go-between, and they will take your call.
There are hundreds of "traders" at banks that are not good prop traders, and the buyside has zero interest in them. To succeed at a hedge fund as a trader, the market maker skill is irrelevant...you must be a good prop trader. That means saying, i am buying xyz security @ abc price in realtime, and my target is 123 within this specific timeframe. THAT is prop trading...and that's what it takes to succeed at a hedge fund or asset mgmt firm.
If you don't have the ability to do this, then why would a hedge fund want you to trade their $$ ?
Thanks for getting back.
I actually do have direct relationships and lines in; with say 3-5 select clients I'm able to chat and pitch them directly. Probably don't have as good a social relationship though which is what has me a bit worried.
Also to be honest I sometimes slack on the effort front when pitching ideas etc, because in this day and age it's so hard to print any business...
think about it from their perspective...why would a hedge fund hire you?
There has to be a concrete reason...aka, if given 200mm to manage from a 10bln fund...he will make 60mm (30%) and he'll get paid 12mm?
I know a bunch of guys who have gone from BB dealer rates trading seats to hedge funds (treasury desk, repo desk, options desk, swaps desk). Want to know what they all had in common? The year before they made the jump, they made ~80mm trading, and they were all very vocal about how they did it, as they were doing it...trying to get everybody else to join in. If you believe you are "right" then you want everybody else to join in. It helps push the market in your favor.
Make 80mm trading at a hedge fund, and you'll get paid 12-16mm. That's what you are shooting for.
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