My bank just fired some traders from FICC

I know some of them personally. While it is true that they may not have been making much money for the bank, they are some of the nicest people I know on the trading floor.

I really feel sad for them and I wonder what else they can do with their lives. Other banks seem to be cutting down their FICC divisions while the buy side is not that easy to go into as they all say. Seriously what can a 40+ year old Vice President or Director do next time when he is fired? :(

 
Best Response

Traders can do whatever.

Technical jobs are the only jobs that really require a specific experience level for success. Traders can do sales of anything, management, etc. Most people are hired based on talent and track record of high achievement and traders usually have both.

The common fallacy about trading perpetuated by college kids on this site is comical. Truly think it's a defense mechanism to substantiate a decision to become a banker, which works 2x the hours and the pay is worse.

 

Wrong. Exit opps of traders are fairly limited unless you're a quant/trader, in which case you can also do tech and a whole bunch of other stuff. There's a reason why so many traders at top banks and funds want to get an MBA.

 
mbavsmfin:

There's a reason why so many traders at top banks and funds want to get an MBA.

This is so wrong and misleading. Just because you went for an MBA doesn't mean others want to as well.

[quote]The HBS guys have MAD SWAGGER. They frequently wear their class jackets to boston bars, strutting and acting like they own the joint. They just ooze success, confidence, swagger, basically attributes of alpha males.[/quote]
 

Yep agree with this. And guys who are actually good are finding ways to make some side money. Have a friend who took 150k and was up 500k on a dozen equity trades. A banker can’t just do that.

The guys coming off trading desks now are not the same people from 10-15 years ago who really had no chance at a top career.

Had the worse year of my career this year. Got paid 150k professional. Thru 100k on valeant as my big equity trade this year and made 100k.pretty sure there’s some skill there to really do one trade and double. Did a few other smaller side trades.

But yes I’m getting my mba part time now because it’s brutal.

Guys coming off trading desks now all have at worse have big state school education. A lot are top 20 school types with 750+ quant scores. Those kids will have better exit opps than 98% of society.

I thought they always told us we would have 5 careers in our life and have to retrain. I’m seeing a lot of mbas, some popping off to corporates, other start-ups. The desks head types, fund managers, firm owners (even like don Wilson) jumping off into pe, vc, real estate . Basically funding their own deals.

The only big difference I see is for the 27 year old guys. They don’t have pe options like the bankers, but if this 2007 instead of 2017 the traders would have better exits than the bankers. If they go corporate the trader might start a little bit worse position.

 

Hi all,

I have a full time offer in credit flow trading (corporate bonds and cds) and another one in rates trading (linear products like IR swaps, FRA, fx swaps)...These two offers are from the same bank..The bank is good in both asset classes in terms of revenues.....What would you choose ?

Which asset class is more likely to be negatively impacted by structural changes in the market (balance sheet shrinking, electronification of fixed income markets etc)

Comments from people in the business would be highly appreciated !

 

HI Martinghoul, thanks for your feedback. could you please tell me why would you choose rates over credit ? For me, both asset classes are equally interesting, but i am trying to figure out which one is going to be less affected by structural changes in the market (bank delevaraging, electronification of FI products) and cyclical reasons (rates going up).

 

I think the whole talk of exit opps for traders is silly. Not only because there aren't very many, but because you don't go into trading thinking its a sustainable long term career where you're going to develop transferable skills. I don't know if I would classify trading as a "career"...learning curve is initially steep but you ramp up quickly. after a certain point you stop learning and any incremental experience/time spent in the business doesn't help you much. A 25 year old trader can be making more than a 40 year old. I see it more as an arcade where you have the opportunity to make a few million bucks quickly (luck is necessary of course) but not something you want to spend your whole working life on. Either you're lucky and after 10 years you have enough saved up that exit opps don't matter, or you use the money to start and grow a side business, or if you're unlucky you just sit there and collect pretty much the same amount every year but nothing fantastic (these are the old guys you see on trading floors that will never make md)...now if you realize this too late, and think the gamble is no longer worth it, then you go get an MBA and try to do something more substantive in business

 
Martinghoul:

I strongly disagree.

As you've just mentioned, you're biased.

Rates got killed at most banks, wouldn't want to be joining those teams. Think of the transferable skills you may learn, honestly the corporate world would open up more opportunities than the rates world.

"After you work on Wall Street it’s a choice, would you rather work at McDonalds or on the sell-side? I would choose McDonalds over the sell-side.” - David Tepper
 

Listen to Martinghoul, he know's what he's talking about. If you join the macro space, all else equal definitely try to be on a more derivatives desk (particularly vol).

Jack: They’re all former investment bankers who were laid off from that economic crisis that Nancy Pelosi caused. They have zero real world skills, but God they work hard. -30 Rock
 

Having to rely on other people to get your job done is tough, especially when half of them are overpaid sales MD's that just sit there, pick up the phone, get you into bad client trades that lose you money, and then can't move your risk when you need them to.

Advice? Move to the buy side asap.

 

Nealurec: " "get you into bad client trades that lose you money, and then can't move your risk when you need them to ".------------------------> hahaha...this is true

Nealurec: you worked in sell side trading previously ?

Any more feedbacks/advices would be appreciated...especially, I would like to hear comments from ex-sell side traders...

For those of you that haven't read the thread, im currently a junior trader (1Yr exp) on a credit trading desk and I have been sharing a little bit my experience so far

 

i'm in a similar situation. Was a junior level trading on a BB vanilla market making FICC desk for a couple years (had just got my own book to take risk and be the primary market maker in an illiquid slice of the market). If i started 5 years earlier, i suspect i would have moved up the ranks in both P&L and responsibilities, but alas, that was not the case. Got laid off in a wave of downsizing a couple years ago. You learn a lot of different skill sets on these vanilla trading desks, but to get really good at discretionary prop day trading (global macro like rates, FX ect..), it takes a lot of time to both get a feel for how a market trades, and to also get a feel for how different forms of technical analysis work...strengths and weaknesse, ect. Eventually, you will get to a point when certain charts "speak to you" and combined with staring at the market ladder and the scrolling news feed and eco page, well, thats how global macro traders daytrade.

So i've put in my time after i got laid off, taking what i learned when i was on the BB desk, diving a little deeper on topics of technical analysis that interested me (doing a little VBA programming to build little tools / market monitors), and have been trying my hand at trading my small amount of money in the futures market. Its much harder to trade your own money than that of a larger firm. Trading my own money, i need to make a 100% return to make an income to replace what i used to make...where as at a large firm, making 10-15%+ return on equity would be killing it. Shooting to make 100%+ requires taking a lot of risk...more than i'm comfortable with.

So my question, to guys like BondArb, Martinghoul, Mbavsmfin and MacroArbitrage...i now feel like i'm ready to go back to a larger firm (ideally a hedge fund like Millenium where lots of individual traders get their own book to trade) but for a variety of reasons, my few contacts in the business are not in a place to help me. I essentially don't have a network to help me get back in. So, how do i get back in? I've tried cold calling a few Millenium type firms, but don't even get a call back. I was a junior guy on a desk previously, so i never built a relationship with guys on the buyside.

I feel that if i could just get an interview with somebody who takes risk in my product area (rates), i could give them reason to give me a shot (even if that just means emailing trade ideas as i get them as a type of "dry run").

Any advice?

 

I summered at a BB in NYC two years ago on their FICC desks (now at another BB).

Shortly after, they laid off a significant number of the people I met, in some cases eliminating entire teams, all the way up to the group head.

The aftermath hasn't been pretty, sorry to say. I stayed on the lookout to see what's been of them. In general, they've either downgraded shop and/or function, or still haven't resurfaced.

2009-2010 was a chimera. S&T in the post-Volcker and AI-revolution era is a very questionable place to be.

The truth is you're the weak. And I'm the tyranny of evil men. But I'm tryin', Ringo. I'm tryin' real hard to be the shepherd.
 

i don't know much about credit...my experience is mainly vanilla interest rates and a little commodity trading via futures in other global macro asset classes (ES mostly, but also some gold, oil, equities, fx).

as far as prop trading goes...there are 250 trading days a year...so 1 mil a year = 4k/day. And yes, i know guys who are making that trading their own account prop...but these are the exception, not the rule. I know a guy who keeps about 250k in his trading account...avgs about 4k/day, and takes it all out as his "salary." Could this guy just grow his account bigger and make a killing with that kind of % return...maybe...but trading your own money is such an intensely stressful activity (making 10k one day, and then losing that 10k the next...is much more stressful than doing nothing for those 2 days with the same 0 net P&L). Even this guy has bad days, and when its your own personal money 100% of the time, the toll on your emotions is hard to compare to a guy trading the banks money on an institutional trading desk. There really is something to say for "all the upside, none of the downside"

if you are on an institutional desk taking risk, then i assume you are knee deep in the broker culture...and a lot of money leaves the street via the brokers. helicopter rides out to the hamptons...helicopter skiing trips, ect...

BB traders typically should expect less than 5% payout on their P&L. I've seen it go as low as 2%. Are there some superstars that get 8% payouts? Sure, but again, those are the exceptions...not the rule.

 

its something i've been thinking about recently. i underestimated how hard it would be to get into a fund when i was no longer in a dealer seat. i'll agree that all the non-trading BS is a real pain in the ass (meetings, risk managers micro-managing your risk position waaay beyond the absolute risk limits, bs tech limitations because the bank is slow as hell at making any changes, making markets to customers in illiquid securities that you have no interest in trading, ect...). However, that is the price of entry.

 

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