How long are holding periods for BB traders?
Are they day- traders? How long is the holding period, minutes, hours, days, months?
I understand that when they trade for clients, the holding period has to be very quick because the client wants their securities as fast as possible. But for prop traders, do they have a required holding period?
Prop Traders do whatever they want generally. If they want to hold it for one hours they will, if they want to hold it for one week they will too. I will say it depends on the product. However, it is more short time
Each product is different. Only in the most liquid products enable a trader to exit a client trade flat or at a small loss. In terms of prop, each trader has their own style I imagine. No one tells them what to do (in my limited experience).
There are no holding period constraints, either for prop or flow traders at a bank. Unless you're extremely junior and you boss doesn't want you to hold positions for too long or smth.
In order for this question to be reasonably answerable, you're going to have to define what you mean by "trader" and specify an asset class. I mean, is anyone who takes principal risk on behalf of the bank a "trader?" In that case, some traders hold for decades - just look at the equity stakes BBs take down in real estate. Those are sometimes "forever" bets. MSREF is a classic example but similar funds are all over. Or shit, how about acquisitons? Are those not "forever" trades? All that an acquisition is at its most basic is buying all the equity in a target and holding it forever. Alternatively, many banks make markets in highly liquid products where your holding period is minimal. Certainly not overnight.
So, yeah. There are lots and lots of different types of trader at a BB, depending on how you define trader. Broadly defined, holding periods at BBs generally fall somewhere between almost 0 and infinity. If you narrow down your question I can narrow down that range.
this is such a stupid fucking response he clearly meant someone on a trading desk, not just anyone who makes transactions. why would you even waste time writing something like this?
but as everyone else has said, it entirely depends on both your desk as well as the banks views on risk tolerance/risk taking. also depends on the current risk you have on and whether or not it was a customer trade
This. As an example, a swaps trader might trade in and out of a lot of positions in minutes. Someone who trades the more complex structured products might have risk for years as it's impossible to unwind it.
Ha, such hostility. Someone on a trading desk? How exactly do you define being on a trading desk? Owning a principle book and having the ability to take down securities? As in, the exact same definition I proposed?
In credit holding periods tend to range from couple of minutes to couple of months. In many banks credit traders get fined for "aged" inventory which is supposed to encourage turning over your book but of course some guys will have big prop positions on as part of the flow books which might be held for far more than the arbitrarily defined aging time.
dude did define it early in this thread; s&t desk. not that hard.
op still need to clarify what product/market tho
i'm not going to waste any more time on this because you know what the fuck a trader is and if you honestly dont, i kinda feel bad for you. but the fact that everyone else knows exactly what this guy was asking and you didn't would make me think that there's something wrong with how you are looking at this, not everyone else. feel free to go through life thinking every single role involving transactions makes someone a trader, but its really just gonna make things more confusing for yourself.
Classic rage quit. What do you want me to say? "Guy who works in an S&T group at a bank trading securities" is just a shitty definition of trader. There are traders that don't work at banks. Does anybody disagree with that statement?
It's surprising to me that this has gone on for so long without somebody being able to give me this apparently simple definition. Let alone take on some of my larger concrete examples about where these lines get blurred.
.
dude are you really arguing semantics on this? he specified BBs, wtf do you think he meant?
Yeah you're right. I think this is really the correct answer. Two gold stars for you.
You make a lot of coke related posts dude. Something tells me you're not exactly sober at the moment.
Here's a good rule of thumb for those confused about this: if your title contains the word 'trader', you're a trader. If it doesn't, you're probably not.
I don't think there is a strict definition of trader because the line between trader and investor is blurry, and those on the PE or Syndicated Loan or Real Estate sides maybe fall more into the investor categories due to the level of fundamental analysis involved and longer holding periods. But typically when I think of trader I think of someone buying or selling something in the hopes of profiting from a spread that arises due to a market of some sort.
A convenience store clerk might technically be a trader if you include physical retail as a "market"...but I wouldn't think of him that way because he's doing it on such a small scale with respect to each product and because he's doing it via a small run down shady ass store and because his counterparties are fat slobs or street thugs and because his prices are fixed (in the US of A) and because his dinky cash register can easily get looted and because he can't turn someone down if they want to buy a pack of Bubblicious or a handful of twinkies and because he's probably locked and loaded and because he probably smells (although those last two could go either way).
In terms of flow business, I wish my term was 10 seconds, who would not want to close a deal with margin everytime. In reality its way way way longer.
On the prop side totally depends on your trade the skills of your people. The stronger your fundumentals and ears to the ground the longer your horizon.
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