Q&A: I'm the head trader for a Multi-strat HF
Went to a top 25 undergrad program, been at HF trading for past 10+ years, ask me anything. been at same HF the whole time so my experience may not be typical
I have no knowledge of the industry, but interested in trading, how did you get started, as you are not the atypical candidate?
I trade everything, equities, fixed income (cash, futures, irs, swaptions, cds, converts, corps), fx, fx options, etc. everything except mbs. I have my own book but honestly trading macro is the one discipline where over time you don't naturally gain a high level of proficiency. I'm not much better now than I was 10 years ago. Mkt is so dynamic. So haven't generated consistent pnl so I only trade for myself sporadically. It's been positive bot not hugely so. So I do execution for two pms, manage risk, do VaR, cash mgmt, help macro pm w managing his book, risk, find best ways to put on ideas. Morning is going through news and summarizing for team. During day, trading, reading, analyzing economic releases, keeping team up w relevant news and trends, book trades, fix crap ops comes to us with, (trade breaks, swap resets, margin calls, signing wires), fielding calls from street, updating positions spreadsheets, reviewing prev days pnl, then dealing w earnings, listening to calls to help the analysts. Then special projects, setting up prime broker accts, negotiating fees, researching trade ideas, new asset classes or products, etc
Trading is a dying field. Eventually much of it will get automated by computers that figure out best way to minimize transaction costs, maximize liquidity, and lower mkt impact. Certainly now a world for quants and guys who study high freq finance. Before it was ruled by relationships w the street and a feel for the tape. Now it's managing and fighting against the high freq guys and min your footprint and information leakage. Math has always been important but quant/programming skills have become more and more important. Desks will prob still need human traders but it'll be less of them. Just like the cashiers at McDonald's. A big shop that had 5-10'traders will need 2 in the future. That's for the trading desk. For analyst/pm roles, ib, Eq research, trading for sell side will still be the feeders for hfs. Alpha generation keeps falling w the Information Age and technology and competition. More and more hf will go under or have to cut fees as 2/20 is hard to justify.
edit...i missed that OP already said he was an execution trader who ALSO has his own risk book. i'm only familiar with bank traders, and "trader platform" hedge funds (like Millennium, BlueCrest, Breven, ect..)...so this seems like a grey area from what i've seen...but maybe this is more common that my experience has led me to believe.
I didn't know there was a difference, Tks for letting me know.