I'm an Author and Former Head ETF Trader at Lehman, Ask Me Anything

Jared Dillian's picture
Rank: King Kong | 1,797

Mod note: Feel free and ask Jared anything and he will be on today answering your questions.

Bio: Jared Dillian graduated from the United States Coast Guard Academy in 1996 with a B.S. in Mathematics and Computer Science, and from the University of San Francisco in 2001 with a Masters in Business Administration, concentration in Finance. Jared worked for a small floor market maker on the Pacific Options Exchange from 1999-2000, and was a trader for Lehman Brothers from 2001 to 2008.

He specialized in index arbitrage and ETF trading. Jared is the author of Street Freak: Money and Madness at Lehman Brothers, published by Simon and Schuster, which was named the number one general business book of 2011 by Bloomberg Businessweek. You can follow Jared on twitter at @dailydirtnap

Jared is also going to be the keynote speaker at the 2013 WSO Conference (discounted tickets almost sold out here -- Josh Rosenbaum, MD of UBS and author of Investment Banking: Valuation, Leveraged Buyouts, and Mergers and Acquisitions will also be speaking again).

Comments (104)

Apr 18, 2013

I am an absolute greenhorn when it comes to trading in investment banking but my friends in S&T tell me really exciting stories. Perhaps could you share your most memorable day on the trading floor? And perhaps what made you interested in this field? Thanks!

Apr 18, 2013

You remember the losers more than the winners--let's put it that way. 2/27/07 was a bad day!

What made me interested in the field was a visit I paid to the CSCE floor back in 1998, in the basement of 5WTC. It was right out of Trading Places. Lots of jackassery and people having fun (and doing quite well for themselves).

Apr 18, 2013

What's your take on the automated trade industry? Computers that use complex algorithms to try and recognize where a stock is going and act on it's decision with actual money? Will we ever build software that just upright replaces traders? Do you know any companies that hire no employees and simply use these computers?

Apr 18, 2013

It's not altogether different from any other industry, replacing labor with capital. I don't have a problem with quote unquote "high frequency trading" or any automated liquidity providers. I tend to think that people focus too much on market microstructure. At the end of the day, markets are markets and even the computers have to be programmed by humans, who are susceptible to the same psychological biases as anyone else.

Apr 18, 2013

Oh! Don't forget at the bottom of every comment there's a yellow box with writing that allows you to "quote" the comment and respond to it as it looks like here. It'll help us see who you're talking to!

Jared Dillian:

It's not altogether different from any other industry, replacing labor with capital. I don't have a problem with quote unquote "high frequency trading" or any automated liquidity providers. I tend to think that people focus too much on market microstructure. At the end of the day, markets are markets and even the computers have to be programmed by humans, who are susceptible to the same psychological biases as anyone else.

Apr 18, 2013

Is getting an MBA to switch into trading still a good idea? I the school a major factor the way it is for Investment Banking recruitment?

Also, I hear all the time that trading is a young man's game. What's the oldest that someone can realistically go to bschool and apply for trading jobs.

Apr 18, 2013
UFOinsider:

Is getting an MBA to switch into trading still a good idea? I the school a major factor the way it is for Investment Banking recruitment?

Also, I hear all the time that trading is a young man's game. What's the oldest that someone can realistically go to bschool and apply for trading jobs.

Sadly, not many firms place much stock in the MBA for trading positions nowadays--they would rather hire younger folks with Bachelor's degrees only.

Having said that, when I was looking for work back in 1999, I came across a retired Marine Corps colonel who was trading on the NASDAQ desk at ML. He was about fifty. It's not a cliche--if you want to do it, it can be done.

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Apr 18, 2013

What are your best tips for effective risk management?

Apr 18, 2013
Asatar:

What are your best tips for effective risk management?

Liquidity is the greatest risk. Size the trade appropriately. The liquidity you use to establish the position may not be there when you want to get out.

Apr 18, 2013

What is your main source of income nowadays?

Apr 18, 2013
KaySpectre:

What is your main source of income nowadays?

http://www.dailydirtnap.com

I got a little money for writing STREET FREAK, too.

Apr 18, 2013

Welcome to WSO :) Look forward to meeting you at the forum.

How do you see the ETF funds market developing in contrast with traditional mutual funds? What are your thoughts on the pros and cons of each from an Institutional Investors point of view.

Apr 18, 2013
perpetual:

Welcome to WSO :) Look forward to meeting you at the forum.

How do you see the ETF funds market developing in contrast with traditional mutual funds? What are your thoughts on the pros and cons of each from an Institutional Investors point of view.

ETFs continue to grow at a very rapid pace and are a huge threat to the open-end mutual fund model. They may make traditional mutual funds obsolete. The hedge fund industry doesn't want to admit it, but they might even be a threat to the 2/20 business model.

Briefly, the major benefit of ETFs is that you can trade them intraday. The downside of ETFs is...that you can trade them intraday. This is why Jack Bogle was against Vanguard ETFs for so long--they do intend to encourage intraday trading and market timing rather than long term investment via dollar cost averaging.

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Apr 18, 2013

Is Fuld a jerk in person?

Apr 18, 2013
Amphipathic:

Is Fuld a jerk in person?

He's a pretty intense dude, and intimidating. I didn't have any direct interaction with him, but I never heard from anyone that he was unkind or overtly aggressive.

Apr 18, 2013

Does your hair always look that good?

Also, were MLP ETFs around in your day? Would like to hear your thoughts

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Apr 18, 2013
CaR:

Does your hair always look that good?

Also, were MLP ETFs around in your day? Would like to hear your thoughts

1) YES
2) No, MLP ETFs were still embryonic when I was trading. I have no opinions to offer.

Apr 18, 2013

I own a copy of your book. Fantastic read! In fact, one of the best I've read in years!

Apr 18, 2013
TraderDaily:

I own a copy of your book. Fantastic read! In fact, one of the best I've read in years!

Thanks my man

Apr 18, 2013
Jared Dillian:
TraderDaily:

I own a copy of your book. Fantastic read! In fact, one of the best I've read in years!

Thanks my man

Sure. Any advice for a desk analyst (equities) looking to transition to a l/s equity fund or commodity hedge fund? As a desk analyst, I don't spend long hours writing research but I do call institutional guys and provide insight and set up roadshows. Have any suggestions for marketing to a hedge fund with this background vs. ER analyst (models)? Any insight would help because it is starting to bother me. Thanks.

Apr 20, 2013
TraderDaily:

I own a copy of your book. Fantastic read! In fact, one of the best I've read in years!

Agreed - definitely worth the read if you haven't yet.

Biggest doofus in the business.

Apr 18, 2013

What is this, reddit now?

But in all seriousness:
1) Ever had sex at the office?
2) Any suggestions on learning how to trade for amateurs?

Apr 18, 2013
D M:

What is this, reddit now?

But in all seriousness:
1) Ever had sex at the office?
2) Any suggestions on learning how to trade for amateurs?

1) NO
2) There is no substitute for experience. It cannot be learned through "paper trading." You have to put your own capital at risk. There is no better teacher than losing your own money.

Apr 18, 2013

Thanks for taking these questions. How do recruiters and trading desks view MSF graduates with 1-2 yrs work experience in an unrelated finance role? Is it possible to break in coming out of the program or do banks really only target undergrads?

Apr 18, 2013
Champs46:

Thanks for taking these questions. How do recruiters and trading desks view MSF graduates with 1-2 yrs work experience in an unrelated finance role? Is it possible to break in coming out of the program or do banks really only target undergrads?

There are fewer and fewer seats. The ideal candidate is from a top 10-20 undergraduate school and plays lacrosse. Nothing is insurmountable, but you will need luck, and especially, some personal contacts.

Apr 18, 2013

How did you make the jump from the military to finance? I'm fellow Academy guy double major and am interested in doing the same.

Apr 18, 2013
zoomie:

How did you make the jump from the military to finance? I'm fellow Academy guy double major and am interested in doing the same.

I was kind of a special case; to obtain experience, I got a job clerking on the floor of the Pacific Options exchange, where I learned all about options. Those kind of jobs are much harder to come by these days. Although it isn't as hard to switch from military to finance as you think; there is this mythology about hiring "tough" guys to work on Wall Street being a good idea. You and I know that there are plenty of slugs in the service, but take advantage of the positive stereotype.

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Apr 18, 2013

I have your book and have been wanting to read it for a while now. One day I will start

Apr 18, 2013

To start, I really enjoyed your book..especially in the fact you were very honest and added a real human side to it that you rarely see in the "Wall St" genre.
Anyway, I was curious if you had any advice as I am in a fairly similar situation to what you experienced...Currently just left Active Duty and now in B-School (not a top 5-10 by any means) and really want to get into S&T or Research. Thanks in advance for any help!

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Apr 18, 2013
miz03:

To start, I really enjoyed your book..especially in the fact you were very honest and added a real human side to it that you rarely see in the "Wall St" genre.
Anyway, I was curious if you had any advice as I am in a fairly similar situation to what you experienced...Currently just left Active Duty and now in B-School (not a top 5-10 by any means) and really want to get into S&T or Research. Thanks in advance for any help!

The military pedigree really helps. Most recruiters are pretty ignorant as to what constitutes exemplary service--all they are really looking for is that you were discharged honorably--so plenty of opportunities to point out Commendation medals and such and beat your drum. As an aside, the unemployment rate for Navy Seal officers is about zero.

Beyond that, be aggressive about developing contacts and networking--the career center at your school is probably not going to be of much help if they are not top 10.

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Apr 18, 2013

Oh yea, any chance you'll offer a student discount?!

Apr 18, 2013

Street Freak was a fantastic book. When are you writing another one?

Best Response
Apr 18, 2013
SirTradesaLot:

Street Freak was a fantastic book. When are you writing another one?

A draft of book number two is finished. It is a novel. It needs a lot of work, and it is going slower than I thought. Hope to get it out as soon as possible!

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Apr 18, 2013

Have you ever thought about getting back in the swing of things and being at a trading desk again ?

"Do you like Huey Lewis and the News?"

Apr 18, 2013
amufb1:

Have you ever thought about getting back in the swing of things and being at a trading desk again ?

I think I have lost any skills I might have had to operate within an organization. Probably my only future in trading is in the PA. But there are a few shops that I have a lot of respect for and would consider an offer if they made it.

Apr 18, 2013

I have no questions, but just wanted to drop in to thank you for doing this.

Apr 18, 2013
KKS:

I have no questions, but just wanted to drop in to thank you for doing this.

Thanks!

Apr 18, 2013

Really enjoyed reading Street Freak! Looking forward to read your new one when it comes out.

Apr 18, 2013

Do you enjoy writing the daily dirtnap more than trading ETFs?

Why did you decide to get into financial journalism vs research?

Apr 18, 2013
jec:

Do you enjoy writing the daily dirtnap more than trading ETFs?

Why did you decide to get into financial journalism vs research?

I do...much less stress, and I really get to use my brain.

I'm really a writer first and a researcher second. If I was a better researcher I could probably charge more...

Apr 18, 2013

You're a class act, Jared. Thanks for doing this.

Apr 18, 2013
Edmundo Braverman:

You're a class act, Jared. Thanks for doing this.

My pleasure

Apr 18, 2013

First thanks a lot for your time!
I am going to work at a BB in trading. I have been accepted to one of the top MBA in two years. Right now I am not sure I will do it. However coming from a "non target" school with an engineering degree, I believe the MBA could really be beneficial for the long term. What do you think?

Thanks again

Apr 18, 2013
bamb92:

First thanks a lot for your time!
I am going to work at a BB in trading. I have been accepted to one of the top MBA in two years. Right now I am not sure I will do it. However coming from a "non target" school with an engineering degree, I believe the MBA could really be beneficial for the long term. What do you think?

Thanks again

I think the answer is yes, but you have to weigh the benefits against the costs. Getting my MBA was pretty cheap in the late 90's, and I was able to pay off the debt after one bonus cycle. Now the degree costs more and you get paid less. That should be part of the calculation.

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Apr 18, 2013

Thanks so much Jared!

Apr 18, 2013

Read the book, thanks for your time

Apr 18, 2013

Could you give a hint or two on your upcoming novel?

Apr 18, 2013
TraderDaily:

Could you give a hint or two on your upcoming novel?

It's trading-related...takes place during the tech bubble in 2000. That's all I'll say.

Apr 18, 2013

Thanks for your response! Really enjoyed your first book, looking forward to the next one!

Apr 18, 2013

Okay, what were your worst and best days in Lehman, how did you feel when Lehman crashed , and what is the coolest thing you have spent with your bonus, thanks!

Apr 18, 2013
Oasix21:

Okay, what were your worst and best days in Lehman, how did you feel when Lehman crashed , and what is the coolest thing you have spent with your bonus, thanks!

I'm gonna punt on this question...it's in the book! STREET FREAK

Apr 18, 2013

What do you think of the term 'in the weeds'

Apr 18, 2013
Cruncharoo:

What do you think of the term 'in the weeds'

I prefer "dicing mouse turds"

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Apr 18, 2013

Thanks for doing this Jared. My boss (ex-Lehman guy) recommended me street freak and it was a great read (read it multiple times). Looking forward to your upcoming novel!

Apr 19, 2013
monkeyspells:

Thanks for doing this Jared. My boss (ex-Lehman guy) recommended me street freak and it was a great read (read it multiple times). Looking forward to your upcoming novel!

Thanks dude!

Apr 19, 2013

Just bot one from Amazon, cant wait to hear your story.

Here's one Q: When you were a junior guy, how did you approach salary negotiation? Any tips for someone moving up the chain? Shallow I know, but nobody talks about this stuff. Thanks.

Apr 19, 2013
BitCoinMogul:

Just bot one from Amazon, cant wait to hear your story.

Here's one Q: When you were a junior guy, how did you approach salary negotiation? Any tips for someone moving up the chain? Shallow I know, but nobody talks about this stuff. Thanks.

When you are a junior guy, you have no pull whatsoever. You pretty much take what they give you. Only exceptions are if you are a rock star producer very early in your career. Once you get established at the VP level, it is different.

Apr 19, 2013

Hi Jared,

Obviously expense ratios are important when looking at ETF's (I have an all ETF portfolio), but what constitutes a good price vs a bad price to you? I've heard a variety of answers to this question - from a few basis points to nothing over net 0.50. I'm currently looking at a possible restructure of my portfolio to account for what I consider relatively high expense ratios.

Thanks and I look forward to buying your book(s)!

...

Apr 19, 2013
BreakingRich:

Hi Jared,

Obviously expense ratios are important when looking at ETF's (I have an all ETF portfolio), but what constitutes a good price vs a bad price to you? I've heard a variety of answers to this question - from a few basis points to nothing over net 0.50. I'm currently looking at a possible restructure of my portfolio to account for what I consider relatively high expense ratios.

Thanks and I look forward to buying your book(s)!

There are a lot of factors. It makes no sense to pay more than 10-20bps for a plain vanilla U.S. equity index, but if you want something more exotic, and you can't exposure to the asset class or strategy any other way, then no price is unreasonable, really. I would gladly pay 75bps to get access to something I couldn't otherwise.

Apr 19, 2013

Hey! I wonder how complicated the maths are in banking and if you need to be a genius to become somebody. Do you consumer yourself good at maths now and did you while in school?

Apr 19, 2013
Truman:

Hey! I wonder how complicated the maths are in banking and if you need to be a genius to become somebody. Do you consumer yourself good at maths now and did you while in school?

Math is/was not really the issue for me--I had very poor spreadsheet skills. I was able to compensate for it with raw trading ability (that sounds kind of egotistical, but true), but it is hard to start a career upstairs or downstairs without being a Microsoft Excel ninja. I was a math major undergrad, but I worked with plenty of humanities majors who were better traders. All you really need is math up to Differential Equations. The spreadsheets are more important. I would work on that.

Apr 20, 2013
Jared Dillian:
Truman:

Hey! I wonder how complicated the maths are in banking and if you need to be a genius to become somebody. Do you consumer yourself good at maths now and did you while in school?

Math is/was not really the issue for me--I had very poor spreadsheet skills. I was able to compensate for it with raw trading ability (that sounds kind of egotistical, but true), but it is hard to start a career upstairs or downstairs without being a Microsoft Excel ninja. I was a math major undergrad, but I worked with plenty of humanities majors who were better traders. All you really need is math up to Differential Equations. The spreadsheets are more important. I would work on that.

Ok! Thanks alot for your answer! Thing is I'm not really good at maths, but I get through them, so it's great to know that your skills don't have to be so extreme :)

Apr 19, 2013

Can you elaborate on what you mean by what you meant in an earlier comment where you say you've lost any skills to be able to work in any organization?

Are you saying that once you've transitioned into working as a trader, it's pretty much tough to transition back to any "salaryman" job at a desk? In terms of the younger folks out there, does this mean once they get into trading, their future career options are much more limited?

Thanks for taking the time to answer questions btw!

Apr 19, 2013
ohstallion:

Can you elaborate on what you mean by what you meant in an earlier comment where you say you've lost any skills to be able to work in any organization?

Are you saying that once you've transitioned into working as a trader, it's pretty much tough to transition back to any "salaryman" job at a desk? In terms of the younger folks out there, does this mean once they get into trading, their future career options are much more limited?

Thanks for taking the time to answer questions btw!

Sure, what I meant is that if you work at a big sell-side institution, you are pretty much a corporate guy, an organization man, and you have to blend into the culture. I'm a little too "out there" for that, nowadays--at smaller hedge funds, there is a little more latitude to let your personality show.

Apr 19, 2013

Thanks for your time in doing this, Jared. It's really cool!

I hope you're still on... I was wondering what was the best way to acquire an edge? How do you go about it? How do you know you have something that might work (on the retail level)?

I think having an edge is more important than any other factor in trading myself (excepting maybe liquidity). Would you agree?

Apr 19, 2013
Tandem:

Thanks for your time in doing this, Jared. It's really cool!

I hope you're still on... I was wondering what was the best way to acquire an edge? How do you go about it? How do you know you have something that might work (on the retail level)?

I think having an edge is more important than any other factor in trading myself (excepting maybe liquidity). Would you agree?

Not really sure what you mean by edge, but for me, when it comes to trading, there is no substitute for experience. I've been doing this for 14 years now, and I'm a lot better, but I'm still learning.

Apr 19, 2013

Ah, sorry, "edge" might be a newfangled term. It's the mechanism by which you make a profit. Let's say you have all these ETFs in front of you. You're not going to randomly buy and sell, right? Well, you use some method to make money, and this method provides positive expectancy (i.e. in the long run you won't go broke).

So I'm wondering how do you find this method? Are you saying experience is all there is to it?

Apr 19, 2013

Hi Jared, I am finishing up my undergraduate degree in finance/accounting and am going into a rotational bank program in which i will be exposed to risk management, commercial lending, wealth management, some trading, etc. At the end of training (about 13 months) I will be a commercial credit analyst. I do, however, have an interest in sales-trading. How hard/easy would it be to become a sales-trader after I stay at my new job for about 2-3 years and then go back to grad school?? Moreover, how does one traditionally break into sales-trading?

Apr 19, 2013
Ian_Mack90:

Hi Jared, I am finishing up my undergraduate degree in finance/accounting and am going into a rotational bank program in which i will be exposed to risk management, commercial lending, wealth management, some trading, etc. At the end of training (about 13 months) I will be a commercial credit analyst. I do, however, have an interest in sales-trading. How hard/easy would it be to become a sales-trader after I stay at my new job for about 2-3 years and then go back to grad school?? Moreover, how does one traditionally break into sales-trading?

Grad school matters less and less these days--if you want to switch over to sales and trading then it would be worth your while to spend some time on the trading floor, making connections, trying to ingratiate yourself with these guys, i.e., kissing ass. That tends to go a lot further.

Apr 19, 2013

Who is your favorite trader these days?
Lastly who is your favorite investor (preferrably among hedge fund PMs) and why?
I am guessing you did not do any Software Dev, but did you code a lot? Do you have any suggestions for students with a CS background going into IBD or fundamental research?

Apr 19, 2013
somehowwonder:

Who is your favorite trader these days?
Lastly who is your favorite investor (preferrably among hedge fund PMs) and why?
I am guessing you did not do any Software Dev, but did you code a lot? Do you have any suggestions for students with a CS background going into IBD or fundamental research?

I definitely respect some guys more than others, but so as not to step on any toes I'm going to decline to answer that here. I will say that, in terms of market thinkers, strategists, or writers, Kiril Sokoloff at 13D is the best of the best. He published some books a very long time ago--you can still get them on Amazon, used.

I have no coding skills whatsover, but as I mentioned in a previous post, they will certainly come in handy. Be careful, though--if you advertise your computer skills too heavily, you are going to get stuck doing everyone's technology B.S. work and spending less time on transactions.

Apr 19, 2013

What was your starting salary at Lehmans? what were you making in your prime?

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Apr 19, 2013
Randianhero:

What was your starting salary at Lehmans? what were you making in your prime?

My first year salary plus bonus (in 2001) was $135,000. As to what I was making in my prime, I'll just direct you towards the book.

Apr 19, 2013
Jared Dillian:
Randianhero:

What was your starting salary at Lehmans? what were you making in your prime?

My first year salary plus bonus (in 2001) was $135,000. As to what I was making in my prime, I'll just direct you towards the book.

May have stated already, but what level did you start at? (analyst, associate, vp?)

Apr 19, 2013

If you were an undergraduate today would it still be your goal to break into wallstreet or would you pursue something different?

Apr 19, 2013
Homunculus:

If you were an undergraduate today would it still be your goal to break into wallstreet or would you pursue something different?

I would absolutely go to Wall Street. Now is the best time ever. The banks and brokers have cut headcount to the bone. And, since nobody wants to go there anymore, you have less competition. Anyone starting now could have a nice career, especially when (not if) the revenue environment turns around.

Apr 19, 2013
Jared Dillian:

I would absolutely go to Wall Street. Now is the best time ever. The banks and brokers have cut headcount to the bone. And, since nobody wants to go there anymore, you have less competition. Anyone starting now could have a nice career, especially when (not if) the revenue environment turns around.

So great to hear a positive viewpoint on this matter. I personally see an upturn too, but the media can really drag you down.

Thanks for all the great insight and I'm buying your book online now too just to hear the story!

Quick question: I probably know the answer given your occupation but just to be devils advocate for a minute. Do you think the growing trend (over)simplifying more complicated investments (diversified stock holdings) into ETFs (could also be applied to structured products/derivs on underlying assets) is beneficial in aggregate as it undermines the need for carful credit analysis or in your opinion do the benefits of simplicity outweigh the costs of what one might call ignorant investing?

Apr 19, 2013
Jared Dillian:
Homunculus:

If you were an undergraduate today would it still be your goal to break into wallstreet or would you pursue something different?

I would absolutely go to Wall Street. Now is the best time ever. The banks and brokers have cut headcount to the bone. And, since nobody wants to go there anymore, you have less competition. Anyone starting now could have a nice career, especially when (not if) the revenue environment turns around.

2013 is one of the most competitive recruiting years I have ever seen...my firm turned away kids who, just a few years ago, would have been shoo-ins.

Apr 19, 2013

Is there any money to be made day trading stocks, considering how hft's fight for micro seconds, if you trade larger time frames like the 5 minute, are human traders still able to make money in the market, or have algo's made human traders obsolete.

I ask because I trade at a hedge fund, intra day, but dont get paid a salary and its all dependent on what I make, but I dont have to contribute anything to trade, they will fund me up to what ever I want as long as I am profitable from 100k up to 20M if I keep getting better.

Its' my third month at the firm and I am still training and going to go live soon. Just wondering if trading makes any sense considering that algo's are the new rage.

I dont want to be the guy that learns how to make type writers when computers were coming out but he failed to see the signs.

Thanks

Apr 19, 2013
rangerdanger 12:

Is there any money to be made day trading stocks, considering how hft's fight for micro seconds, if you trade larger time frames like the 5 minute, are human traders still able to make money in the market, or have algo's made human traders obsolete.

I ask because I trade at a hedge fund, intra day, but dont get paid a salary and its all dependent on what I make, but I dont have to contribute anything to trade, they will fund me up to what ever I want as long as I am profitable from 100k up to 20M if I keep getting better.

Its' my third month at the firm and I am still training and going to go live soon. Just wondering if trading makes any sense considering that algo's are the new rage.

I dont want to be the guy that learns how to make type writers when computers were coming out but he failed to see the signs.

Thanks

My opinion--with algorithmic trading, I think it is very hard or impossible to make money day trading unless you are exceptionally smart or talented. All the short-term edge has been arbitraged away. The irony is that this leaves plenty of edge for the long-term investor--when holding period is measured in months or years, you have a much bigger advantage.

    • 1
Apr 19, 2013

Why do I have to play lacrosse to be a trader?

Apr 19, 2013

Hello Jared,
I am currently a third year at a target-school in the UK. I have developed a passion for markets 6 months ago, when I met a head trader, and immediately applied to 3 BBs, which threw me in the bin after the application.
I have had experience in my first summer in tourism for a month, but really nothing financial. I also did not apply to any internships in my second summer. Now that I am graduating, I am thinking of doing a 4th year in management, in case I cant get anything at a bank.
I am considering paying money to get an agency to allow me to go to india over the summer to get some experience. It is about 3k everything included for 8 weeks: capital-placement. com/area/india/placement

Do you think it is sensible?
Also I watch the stock market open every day on Bloomberg and am thinking of reading a trading book. Any suggestions? Also, is there anything else except networking that you could recommend me to do to increase my chances?

In case you get to answer my questions, thank you very much!

Apr 20, 2013
Kassra:

Hello Jared,
I am currently a third year at a target-school in the UK. I have developed a passion for markets 6 months ago, when I met a head trader, and immediately applied to 3 BBs, which threw me in the bin after the application.
I have had experience in my first summer in tourism for a month, but really nothing financial. I also did not apply to any internships in my second summer. Now that I am graduating, I am thinking of doing a 4th year in management, in case I cant get anything at a bank.
I am considering paying money to get an agency to allow me to go to india over the summer to get some experience. It is about 3k everything included for 8 weeks: capital-placement. com/area/india/placement

Do you think it is sensible?
Also I watch the stock market open every day on Bloomberg and am thinking of reading a trading book. Any suggestions? Also, is there anything else except networking that you could recommend me to do to increase my chances?

In case you get to answer my questions, thank you very much!

I don't mean to be a jackass, but I think the first half of Chapter 6 of my book will tell you the kind of effort it takes to get a job. You are on the right track--it takes lots and lots of effort.

Apr 20, 2013

Cheers dude, I will have a look. Congrats on the reviews.

Apr 19, 2013

Hello Jared,
Thank you for being here. I have three questions: First, what is the advantages and disadvantages of the Proprietary Trading Firms comparing to the large instituions (are Proprietary firms lack of source of information)? Second, some firms have a very longterm trainning program before trading (BP has three years training) while some firms you will be trading with real money within a relative shorter time, do you think which type of firm will be better? Third, is there any possible one can become an independent trader without joining a firm? Thank you!

Apr 19, 2013

I've always wanted to ask you this....What the hell is jay Knight up to now?

Apr 20, 2013
kyleyboy:

I've always wanted to ask you this....What the hell is jay Knight up to now?

As of when the book came out, in 2011, I heard he was still doing the same thing!

Apr 20, 2013

Thanks for this Q&A. You just won another sale of your book.
Just a quick question, if you had to guess how many "senior traders" (say VP+) started with LB ? How many joined from another bank ? Did some come from trading in an HF, prop shop or commo house ?

Apr 20, 2013
TheSquale:

Thanks for this Q&A. You just won another sale of your book.
Just a quick question, if you had to guess how many "senior traders" (say VP+) started with LB ? How many joined from another bank ? Did some come from trading in an HF, prop shop or commo house ?

Most of the talent at LEH was homegrown. I will say that proprietary trading at a bank is different than at a hedge fund or prop shop because there are not as many constraints on capital.

Apr 20, 2013

1st and foremost, great book. Read it after getting a rec from Phil Vehec.

2nd, despite what the current market for S&T displays, I think you're correct. We are at the bottom of a business trough. Most banks are at skeleton headcounts and when the markets pick back up, better days are ahead. Regulation is taking forever to get implemented, but banks are finding ways around it with SSG's. I think implementation of regulations will continue to get delayed until a Republican Prez is elected and removes the whole lot.

3rd, what are some interview questions you'd use to determine if a candidate had "what it takes"? Most interviewers have 1-3 questions they always ask.

Lastly, good luck with your novel.

Apr 20, 2013
BreakingInDamnIt:

1st and foremost, great book. Read it after getting a rec from Phil Vehec.

2nd, despite what the current market for S&T displays, I think you're correct. We are at the bottom of a business trough. Most banks are at skeleton headcounts and when the markets pick back up, better days are ahead. Regulation is taking forever to get implemented, but banks are finding ways around it with SSG's. I think implementation of regulations will continue to get delayed until a Republican Prez is elected and removes the whole lot.

3rd, what are some interview questions you'd use to determine if a candidate had "what it takes"? Most interviewers have 1-3 questions they always ask.

Lastly, good luck with your novel.

Thanks!

I had only one interview question:

Are you lucky?

When you get to that level, most candidates are pretty much equally bright and determined--all else equal I want the guy or girl that falls ass-backwards into money on a routine basis.

Apr 20, 2013

Loved your book Jared, thanks for doing this.

On a side note, as a former military guy, I absolutely loved your post awhile back about wasteful military spending - it really brought me back!

Apr 20, 2013

How much does your degree or college matter after a few years of experience?

Mps721

Apr 21, 2013
Mps721:

How much does your degree or college matter after a few years of experience?

It matters not at all. All that matters is what you produce.

    • 1
Apr 21, 2013
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Mps721

Apr 22, 2013
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"It is our fate to be tormented with large and small dilemmas as we daily wind our way through the risky, fractious world that gave us birth" Edward O. Wilson.

Jun 20, 2013
Jun 20, 2013
Dec 10, 2018

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