It's a bit slow today due to the US being on holidays, so i thought this might be a decent opportunity to answer some questions. I got a lot of value out of a similar thread i saw about half a decade ago. I have been a trader at a large investment bank for about 4 years. I trade commodities, but also have a lot of exposure to FX and rates. Started off in a different industry/role but managed to enter the industry 2 years after I graduated university. Originally based in a different city (think Singapore/Hong Kong) but moved to work in the London office a few years ago. I may be slightly vague in some aspects as once you start nailing down to specific products/assets its can be a very small industry. Happy to submit proof to a moderator (although im not sure how to prove my job?), however i think my answers should make it clear i know what i'm talking about.
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Let me think about that first question as its hard to talk about a recent trade without getting very specific on niche products which would expose who i was if someone i knew were to read this.
I graduated as an engineer and worked for an engineering firm after university. In those two years i got very interested in trading and eventually decided i wanted to make the career swap. I struggled to make any progress (i didn't get a single interview) with any of the banks. This was pretty understandable as a) i wasn't a fresh graduate b) i didn't really have any way to tangibly show i was interested in the position. I did however get a interviews with most of the prop shops (optiver, tibra, flow traders, SIG, akuna etc) as i was able to pass the maths tests. I ended up getting called for a screening interview for what was the only bank interview i was offered. I think i performed okay in the phone interview, but luckily for me, the interviewer asked a tricky probability/logic question at the end. I had been studying a lot for the prop shop type logic questions and i was able to get the correct answer (later i would learn i was the only person who answered this correctly). I think had i not answered it i wouldn't have stood out enough to go through to the next stage. After that was a series of interviews with various people on the desk, and i got lucky that the desk head was happy/preferred to hire someone with a few years of work experience. I was hired directly onto a trading desk and didn't go through a rotational program.
It was a tough decision to me to choose between optiver type of shop and an investment bank. I believe the short term upside would have been higher at optiver. However, i was coming from a different career already. I did not want to wash out as a trader at optiver and have to start another career. It was reassuring to me that if i didn't make it as a trader at an investment bank i could probably find another role within the organisation. The type of trading more suited what i was interested in as well. As well as running the franchise business the desk does their own analysis and prop trades directionally (or vol, or spreads or whatever), compared to what i perceived as mainly making money by making markets at the prop shops (although retrospectively i now know they take can take decent positions).
From there its pretty straight forward. Learning to be a trader is more an apprenticeship than a training program. Sit with the other traders on the desk, learn how to quote, manage risk, do adhoc analysis, longer term projects, get coffee, whatever is needed. Then people are off desk for a little bit and you cover for them. Then people take a days leave and you're able to cover their book for them. Then i was given a little book with not much flow to manage along with everything else i was doing. Eventually took on more products as people left or a new asset was being marketed etc. At some point along the way a trader in London was quitting and i was asked if i wanted to move there and take over their books.
Trading is very much like an apprenticeship. At first you're just watching, then helping a little, then covering when someone isn't there, and then one day you realise that you're just running your own thing.
Apologies, i forgot about your last question in my previous answer.
A typical day (pre covid).
6am: wakeup, check overnight markets while laying in bed, some form of exercise (usually a run), walk into the office and at the desk by 7-7.30am, grab a coffee and something to eat from the cafe on the way to my desk.
Run risk, read news, maybe a meeting either with the other traders or sales etc. When there's flow to quote i price that, if not im doing my own analysis, coming up with trading ideas, handling admin, chatting to people in the market.
Lunch at desk, usually deliveroo, on a quiet day might duck out for 10 mins and buy food in person, but still eat it at the desk.
The same in the afternoon. Quoting flow, chatting to people in the market, or doing analysis for my own positions. High chance a sales person has booked me to be on a call with one of their customers (maybe a corporate thinking of a hedge program, or a hedge fund looking at the market) to talk about the market.
5-6pm leave, bit of down time. On a Thursday probably gets beers after work with a colleague or brokers.
Although i call this downtime, if my phone goes i have to be able to respond / quote / trade. The markets are still open and things are happening. Or a sales person in the new york office needs something of me.
10pm. Final check on things before i go to bed. Pnl estimate for the day sent out. Make sure i have a good idea of how my position will look tomorrow morning in each product, maybe i have to do a bit of position management due to the positions changing due to time/vol etc.
Weekends are completely my own time. Maybe if I'm far behind on something i need to complete i catch up on it on the weekend, but this isn't necessary.
First on comp: If you're an average performer, your equivalent pay today will be less than it was 15 years ago, but will still be higher than 99% of the workforce. If you're a high performer, the sky is the limit as a trader. You can still earn >$1m at a bank and there is literally no limit to what you could earn at a fund. Only a small % of traders achieve this though (obviously).
If that paragraph discourages an aspiring trader than I think they should consider a different career anyway, I wouldn't hire someone who was aiming to be an average performer. Lastly, If the deciding factor between trading and investment banking is +/-$100k difference in salary 5 years down the line, I don't think you're passionate enough about trading to be a trader anyway.