Traders who work for Mutual Funds
Hi, I have a quick question, what do Traders who work at large mutual fund do? For example, a trader who works for Fidelity, what exactly does he do? Make markets, buy for fund managers, etc... And how is his work different than say a guy who works at FNYS, and JaneStreet...
Thank You,
A trader at a mutual fund executes trades (i.e. a portfolio manager tells you to buy 50,000 shares of AAPL).
At the prop shops you decide what you want to buy/sell and try to make short term profit. Generally, people that are unable to be profitable at a prop shop would try to exit to an execution trading role (e.g. mutual fund, hedge fund).
then why is a trader's role regarded as more prestigious than that of a broker? A broker's role is also just execution trading by matching buyers and sellers,as ordered by its clients. Correct me if i am wrong.
they just execute trades for the PMs of the various funds. deal with the sell-side traders, source liquidity, blocks, find best execution. traders at FNYS are prop traders. just trying to make money by taking risk
First off, Fidelity has fixed income traders which run funds within Pyrammis.
Then fidelity has buyside traders who execute.
Neither is a broker, when your dealing with that kind of size it becomes quite a different story. Even the short-term, money markets traders at fidelity buy different kinds of instruments and manage alot of cash that needs to be invested, there is for sure alot of strategic work and chance to make themselves a profit. Ofcourse this is all overseen by the PMs.
"Even the short-term, money markets traders at fidelity buy different kinds of instruments and manage alot of cash that needs to be invested, there is for sure alot of strategic work and chance to make themselves a profit. Ofcourse this is all overseen by the PMs." So if they decide where the cash needs to be invested, wouldn't that make their role similar to prop traders?
A broker is considered less prestigeous because he makes much less money (when you are advising middle class people on how to invest tiny amounts of money you cannot make much).
Execution trading in almost all cases is a relatively simple role - you just try to buy securities that a portfolio manager wants at as cheap a price as possible. Still at mutual funds and hedge funds you can make far more than a broker. Still, the more complex the product you are trading (e.g. certain derivatives) the role can get a bit more complex. If you are interested in valuation you should become an analyst --> portfolio manager.
If you are interested in short term speculation you should become a prop trader.
But what about institutional brokers? their clients are not middle class but big institutions.The Place where I am interning(inter-dealer broker), one of the brokers at securities desk is always placing trades for clients like Credit Suisse,JPMorgan and also Fidelity.Would he be making decent money? Is it something like the trader from Fidelity contacts the broker and and tries to get the best price?
No difference between an execution trader and a barista. You just take orders.
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