Asking in IB forum to elicit real answers.. Does sales and trading count as high finance? I understand that at BBs the programs are usually as selective as IBD, with fewer seats and fewer candidates recruiting for s&t as its relatively niche. But is it prestigious? Is it elite high finance? Do they go to hedge funds? How much can they make?
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1. High finance is a made up term. Just means dealing with a lot of money. What do you think people in S&T do all day?
2. Traders have been known to be the highest paid people in the banks they work in (including C-Suite).
3. Yes they go to hedge funds, where do you think macro funds get their talent from?
Macro funds hire from macro desks? They don't hire bankers?
Why would they hire bankers? What would bankers know about trading rates or commodities or FX?
How the fuck do you work in S&T? No way you really work in markets.
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High finance = job positions that I masturbate to
Let me tell you I’ve jacked off to plenty of traders.
banana
An investment banker is a sales man. A sales and trading guy is a chimp
I genuinely think 98% of this forum would be stunned to learn about salaries in commodity trading. Not hating on your question, especially as the skill sets are different than banking, but an average value trader in commodities at the right shop will work fewer hours and bring in more $ than an average MD in banking at a much younger age. Stress factors are different as are many of the drawbacks of the job though
And yes, hedge funds do recruit commodity trading - especially right now with the energy super cycle. Too young to know if that stays long term or is cyclical fwiw
I mean macro funds right? god macro is so cool idk how these people analyze companies all day
Macro in the sense that a natural gas trader cares deeply about national storage levels, LNG flows going out of the country, imports and flows between regions. A Nymex desk is more macro than a regional desk but both desks care about macro events. The nymex desk will also trade options and market make. Regional desks care if a pipeline explodes, there’s maintenance on a pipe flowing from the Permian to another region. The regional desk might pay a plane service to do a flyover to see how maintenance is coming along / a crude desk will have infrared cameras pointed at a refinery to see if it’s producing the volumes they’re expecting. Our crude guys monitor traffic flow in China city by city to see how demand is coming along. Crude guys will also count cars in parking lots of refineries to see if the facility is fully operational. A crude/products desk is going to be more globally concerned than a natural gas desk is too.
I will say, the top places to trade are not the places you would expect. Not really sure about crude, but in NatGas you want to start your career at a shell/bp/ I think Phillips 66 is getting good. Most people will stay at those places because they pay GOOD. Sometimes the young guy who’s good who wants to make more % of book will go to a Citadel/Balaysany or a trade shop like Trafigura/Vitol, but it’s also usual to stay put if you’re at a shell/bp. Those other places will fire you faster if you make a bad trade. The investment banks who trade commodities typically don’t spec trade the same way the places above do, so they’re less sought after generally.
If you're referring to physical, yes it's a very interesting career. The issue is there's a low chance of getting into a proper trading seat and I'd go as far as to say a lower chance than in S&T.
What are some more of the drawbacks?
Originally if you were on a trading desk at an investment bank, you were “an investment banker”. This use to be where all the money was. What we call investment banking now use to just be “corporate finance”, I believe db still uses this language for the position.
Yes S&T is high finance. You’re in the markets all day, it probably feels more finance than what I do as a PowerPoint logo mover stressing about changing a BS “key investment highlight” and having to reorganize a PowerPoint deck
Believe it or not, the highest earners at the major investment banks are usually traders (including the CEO)... As for your hedge fund question, just do some research and look at the background at some of the largest hedge funds in the world (Brevan, Bridgewater, Millennium, Moore, Bluecrest etc) and see how they started.
Sell side trading is dying profession. It’s increasingly computerized. Buyside trading is math wizard game.
Untrue. Lots of desks are FAR from computerised, and won’t be in the near future (think lots of rates desks, credit or even the whole sales aspect). Obviously cash equity desks are non-existent, but that’s just the tip of the iceberg of how many products you can trade on the sell side.
Not sure what you mean with “math wizard game” but I can assure you that some macro traders are doing much more than just some math, especially in recent times
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