Why Dishonest Traders Make The Most Money

Once again, anthropologist Joris Luyendijk of The Guardian's Banking Blog is back! This time he brings us a brutally honest story from a fast talking, energetic, 30-something who’s worked as a FI and FX trader in Northern Europe. He talks about the spending lifestyle and the male dominated culture of trading. I've formatted it into a Q&A interview with responses from his monologue, not mine. If you're interested in the trader lifestyle, especially overseas then read on...



As a trader, you can be everything you want to be..."



Q. What’s it like being a professional trader?
A. On the floor, its guys jumping on top of each other shouting “yours” or “mine”? Maybe it’s the power, as the financial markets are the mechanism that enforce capitalism and the interest and exchange rates set in the City have direct economic consequences for their countries. For example, if I sell 1M Kr, BAM! It has an observable effect on the market. My screen bleeps and I say, “See that. That’s me.”


Q. What happens if you make a mistake?
A. We’re constantly under tremendous pressure and screaming helps relieve some of that. However, if someone processed a trade too slowly or missed an opp costing the bank millions then I’d rip into them for a good half hour until I was stopped by my colleague in fear of disturbing our clients on the floor.

Speaking of mistakes, I once sold 40M Kr in a second, pre-central bank announcement. The bids and offers were thin and trading had virtually ceased. In trader speak, the market puked despite a few algos and stops being hit. I was lucky to make it all back and then some before the news broke. Looking back at the currency graph, I easily spotted my mistake saying, “See that. That’s me saving my ass.”

Sometimes, a trader is made redundant and an entire team can be canned and go to another bank so there’s no loyalty at all. His book is left open and taken up by another trader while his positions may be profitable. But if their book is a loser then the latter complain about how he was a crap trader. The reality is, the bank is just a shell to place your trades from.


Q. Is it that serious all the time?
A. It’s not serious everyday but you do have to be on your game. If you say one stupid thing, it can be with you for years and we do find time to play pranks. Once, we raided the bank’s store of Blu-Tack, a substance for sticking papers to a wall and put the stuff all over the guy’s desk! Sure we taunt people but it’s all fun and games, plus it helps blow off some steam and let the guy know your in his camp.


Q. So what’s the trading lifestyle like?
A. Many guys are fixated on money and status and would tell anybody the value of their car, house, or brag how much tip they left last holiday. Some of them even competed in charity events, seeing who gave what and how much. Once bonuses are announced they can't even wait for the check to come in! They run out in droves to spend conspicuously and within a week they return with a new Rolex or expensive car. Personal and business mixing was always on the menu with business class flights, 5-Star hotels, and ending up rolling into exclusive brothels or strip clubs where the brokers would pay since we traded so much volume through them.


Q. How's the workplace culture?
A. It's said trading is a meritocracy. HA! I've seen younger family members end up high in a bank or a brokers’ relative appear without going through the interview process. Fact is, most traders I've dealt with are not even upper-middle class, rather really tough working class. Even then, the most important thing is how “your face fits.”

Once, I found myself at a Christmas party talking to a young secretary who was going through difficult times. From the mix of alcohol and emotions she eventually broke into tears. As I tried to calm her down the only form of sympathy my colleagues offered was a signal to go in for the kill and have sex with her.

Even for guys who have a wife or girlfriend, it’s perfectly normal to ridicule them your in front of the guys. Females are typically called “wallets”, short for wallet-chasers and for some guys that’s all they are.


Q. To conclude, would you like to add anything else?
A. Trading is all about performance. You either deliver or you don’t and this is partly reflected in your pay. Good traders make good money and don’t think for a minute that some of them haven’t brokered a nice deal for themselves. But the reality is, this is not an old man’s game and the skill set is limited so it’s best to build your wealth while you can.

Lastly, I've seen many somewhat dishonest people in banking and it’s often these people who walk away with the most money. Perhaps, there’s a negative selection going on where most decent people decide it’s not worth it morally OR doing it solely for the money. However, my observation is...

The system feeds on itself and it's not going to change."



Questions, comments, concerns? Put it below.
 

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"I'm going to make him an offer he can't refuse."
 

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[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]
 

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