If traders can make more money and have better hours...
...then why go into investment banking?
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Repeat after me
Bankers are not traders
Traders are not bankers
"Oh the ladies ever tell you that you look like a fucking optical illusion" - Frank Slaughtery 25th Hour.
Because those are not the only things people care about...
I for one also want to be sure that I like the actual work I'm doing. Trading is not for everyone (and the same can be said for banking).
There's a whole bunch of reasons why people prefer one over the other. If you knew exactly what the two were, you wouldn't be asking the question.
both those jobs attract two very different personalities. and just because traders can make more money, does not mean that most do.
It's a lot easier to be noticed if you are a mediocre trader than a mediocre banker imo. As people have mentioned, there are so many reasons and the personalities are a major part of the difference. Another example is exit ops. Traders generally stay in trading, whereas bankers can go to VC, HF, PE, etc.
And risk=reward. Traders are done based on P&L versus bankers where it is more of a community effort. If you do prop trading you can have a base of like 20k and have a bonus completely dependent on what you do. You can make 0 or 500k in bonus. In banking you obviously get a bonus that is somewhat guaranteed and you are not wholly responsible for it, your team/group can destroy that year and all bonuses are higher
So what do you do? -I work for an investment banking firm. Oh okay; you are like my brother, he works for Edward Jones. -No, a college degree is required in my profession
number of ppl that can make money trading
[quote=pedaltodaflo]number of ppl that can make money trading trading you need advanced math skills (unless you trade plain vanilla products which will make it harder for you to earn money for the bank meaning that your bonus will be less).
@amback: I completely agree to your comment. especially on the hf exit opps. It does not make any sense to me why a hf should be interest in an m&a guy. Fields like risk management and trading is far more related to hf than m&a.
To sum it up. Basically, I think there are three reasons why people go for m&a rather than trading. Firstly, the dont have the technical knowledge for trading, i.e. math skills. Secondly, they seek the prestige of m&a, i.e. working on newspaper front-page deals. Thirdly, they truely enjoy corporate finance and how company's can be assessed from a strategical and financial perspective.
Obviously, reason number three is the one you should answer for yourself with "yes" to go into m&a. Being "yes" on reason 1 would mean you better stay out of m&a alltogether. And "yes" on reason 2 means you are a spoiled character who has no idea of life anyways. In this case you better get some work experience in a charity organisation to see what life is about.
The number of crap people will write to answer the question, as if they knew something. First of all: TRADING = INVESTMENT BANKING you fucking muppets. Now M&A is NOT equal to Trading.
M&A => bitch whiped by some ass hole who gets a boner giving you work at 8PM while he could have given it to you at 1PM; it would have avoided you fucking around during the day and wasting your Saturday night.
M&A => you go work for a hedge fund??? WTF??? Do you know how many fucking ex M&A bankers work in a fund? When you are in a fund you trade, what prepares you to trading? A career in TRADING! WooFuCKiDipiWoo!
Now the positive sides of M&A (most of my mates work in that crap) You do have PE, VC exit opps that you will most likely not get after trading. M&A, you might not be verbally raped every day (although that depends sometimes on the teams)
As someone correctly mentionned: M&A is for one type, Trading is for another type, and finally you have the rest of you fucking ass holes who will never make it and will be washing my toilets!!! (Joking on that one... If you don't make it into I-banking it's not the end of the fucking world, and there are millions of other jobs out there that can be 1000000000 times more rewarding, emotionally as well as financially)
Although I do have to admit, I get a big boner when I see my M&A friends argue about who closed the biggest deal (on very rare occasion I see them, they go to the alumni drink once a month, usually hang out for an hour and go back to the office... Ha ha..)
Oh, and when I say M&A is not for everyone, two of my friends quit GS. And you know what? You might think it's crazy, but you young morons have no idea what you are getting into, and can only look at "oh a bonus!" There is also this thing called having a life, and you'd be surprised how much fun it is to go to the pub and actually, you know, be social.
That was me rambling on, haven't had the time to post on this forum since I started my job. I was actually just interested in the how much money are people making on average at the moment post :-p
And my personal: I work in equity trading, and I LOVE IT! Can't say that for most of my M&A mates... (If you are a bit softer, you go make bigger bucks in FI, but it's less fun ;)
Not to discredit your post, but what are these other jobs?
[quote=pedaltodaflo]number of ppl that can make money trading
To back up AmBack's account of Banking vs. Trading... I have many mates who work in trading as well, and their seniors typically allow them to come into work whenever they want, seldom expect them to do anything too emotionally taxing, and usually ask them repeatedly throughout the day if they are doing ok with the workload, how their day is going, if there is anything else that can be done to make their lives easier.
Give me a break, Euro fag. If you had a full set of balls you'd be working in NY instead of frolicking with your mates in the pub. At the junior level in banking and in trading you deal with senior people who are very successful and as a result have a huge fucking ego. They expect a lot from themselves and typically expect just as much if not more from the people who work for them.... this translates to having to deal with seniors who aren't always wiping the ketchup off your chin and asking you if you're doing ok. While not all seniors treat people like shit, you do notice the more successful ones tend to have a chip on their shoulder. AmBack, if you're working in a group that gives you a reach around every day before you go home, you're probably working in a horse shit group where none of the people do jack shit for the firm, and as a result don't give a fuck if some analyst/associate isn't doing shit the right way. Every other trader on this board will tell you, its no walk in the park.
On another note, there are people who love trading and there are people who love banking, not everyone has the go-nads or personality for wall street (those who don't go to Canary Wharf).
Also to the OP's question... at the JR level, traders and bankers make the same amount of money. When you hit the point of traders making more than bankers, not all JR traders are capable to getting to that point. Similarly, not all JR level bankers end up at the MD level.
Judging by the comments on this forum this does not only apply to senior people.
Someone said you need advanced math skills to make a lot of money in trading.
You don't.
The same person said people who went into banking did so because they lacked the math/technical skills. No banking/trading candidate with a decent shot of landing a job decides what they want to do 1 month before on campus recruiting. Any of the candidates capable of getting a trading job could apply themselves towards securing and banking position and vice versa. There is no level of math required in trading that someone at any number of these top schools(or any other school, for that matter) cant take the classes to learn.
You people are ridiculous. There is nothing that complicated about trading or banking. No one goes into either field because they lack the qualifications to get into the other. Its a fucking joke, you go to a handful of schools, you get good grades, you know how to play the recruiting game... you get a job. Period. They are not selecting people to preserve the human species.
This field may be prestigious to the outside world, anyone on the inside knows there is nothing all that fancy or sophisticated about what we do outside of being worked to the bone. Anyone who tells themselves different is lying to themselves.
Well put, cannot agree more.
Because bankers are stupid, and you are smart for having realized the discrepancy between the two professions.
@bigunit & marcus: sorry, still disagree with both of you. As long as you trade any products which are standardized in flow trading I would agree that the level of math is fairly easy.
But as soon as you go into the customized products it may get fairly complex. Otherwise I wonder what is so difficult to attach a price to certain asset-backed securities. You may encounter that market environment is abnormal, historical correlations have temporarily reversed or whatever. Fact is, if done properly valuations should have included any of these events.
I also wonder why these roles are primarily filled with maths/physics or engineering grads. Still, this does not mean that any intelligent person with another background cannot learn the math required. Yet fact is, you do not learn these things with harvard case studies in general management education.
antibanker - understand the sentiment - an example: interest rate traders are great at what they do because they can predict how news flow effects what they do and how quickly they interact and respond to sales people, which in turn brings new clients to their corresponding sales people and thus to the trader.
However, all the initial valuation/structuring of interest rate contracts are already done - the trader just decides how they change in respond to the market.
Of course products that require advanced math have better margins, but that doesn't mean you need superb math skills to make a ton of money.
A) Not all traders make more money, in fact most don't; if you look closely at most compensation data you will see that if you take out the outliers for traders, bankers usually make more. B) Trading jobs can be alot more volatile. C) Different Strokes for different folks, you have to like what you do as well, getting paid should not be the only factor driving your decision.
the traders who are market makers will tell you that no advanced math skills are needed for what they do and what they do is pretty routine after you get the hang of it. i would imagine that prop traders are the ones who would need more advanced math.
i was wondering how college students who're interested in S&T would know beforehand whether or not they'd make good/decent traders. judging from some of the posts here, it seems that most people in trading are average at best, so it's a pretty scary thought that one could land an analyst spot in S&T and then find out that he/she isn't a star trader and has nowhere else to go, given the limited exit ops for S&T
You usually do a year (or two) of a more research/fundamental role to get used to the floor, which gives you options to lateral to a different divison if trading isn't for you. A lot of people who start out as bankers and researchers end up moving into portfolio management roles, which is a good end result, and bypass trading because they don't have the stamina/willingness to put up with it.
Is this the same at prop shops?
Probably not. Keep in mind that at BB's you are working with tons of different people (capital markets, researchers, sales people) and in a client-driven role. In prop shops you aren't, so I doubt the same lateral opportunities exist.
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