Advice for a 21-year-old entering BB S&T?

Dear WSO,

I am a 21-year-old Junior at a non-Ivy target. I am very thankful and fortunate to have been recruited into a BB for the 2020 Summer in S&T. I had put my recruiting efforts into trading, as this is something that fits my personality, interests... I really care about this and am seeking advice from trading professionals to help me start out on the right foot in the new decade...

1) Asset Class Placement: Automation in trading is killing headcount, and will do so at an accelerated pace. So how would somebody young like myself avoid this? Does it mean that I should find a niche trading asset class, immune to automation (at least for 10-15 years), such as ABS trading, illiquid options, high yield bonds, level 2/3 derivatives? If so, which specific subcategories are interesting and growing as a business.

2) Trader Role Placement: Given the product type, which trading roles at a BB are best to work in, for the 20's decade, onward? (i.e. flow trader, agency...)?

3) Autonomy: Which combinations of asset class and trader roles are least restricted by prop trading regulations? Looking for more autonomy...

4) Growth: Which combinations of asset class and trader roles are becoming more prevalent/increasingly important in the financial markets these days? There is always a growing business and looking to start off in a growing market.

5) Exit Opportunites: Which combinations of asset class and trader roles are most transferrable outside of a BB?

Note: I know it sounds a bit ridiculous for a college junior to be so specific this early on. It should be more about exploring options and opportunities. However, I don't want to be naive and start off doing Equities in Dallas and get automated out. I want to be prudent with whom I focus on developing connections with, desks I rotate, and long term focus to have a successful career. How to succeed as a Summer Analyst is a whole different conversation which I am also focusing on, but this post is about industry placement.

All advice from S&T professionals is most appreciated.

Thank you

Comments (13)

Feb 12, 2020

You said it yourself with the automation part. If you still want to do this, I hope you have the technical ability to be relevant and being part that is doing the automating. The pace that things are getting automated is a lot quicker than you expect (as I thought 5 years ago). As an example, back then people said credit wouldn't get automated because of illiquity and all of the different bonds... Well 40% of the market is now automated in just the past few years. If you don't have this skill set, it's probably best to go into something that is more structured (deal based) if you don't want to be automated - even better look into IB.

As long as you're at a reputable place, every desk is taking mostly prop risk. It's the biggest misconception on this forum. It's impossible to classify what is prop trading and what is for client flow. Especially in macro, there will be swings day to day, week to week, month to month. It's just harder to justify holding positions for an unreasonable long amount of time, but you'll be prop trading everyday.

As for growth and exit opportunities, I hate to break it to you, but there's not much here other than doing the same thing for slightly more money if you're a good risk trader (won't be paid as much as before). As for growth, this is not an industry of growth to say the least lol.

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Feb 14, 2020

@koalamacro thank you for the insights. Guess it time to put more focus into learning code.

Didn't know that credit is getting automated that quickly, so I'll look towards something more illiquid, deal based.

Regarding exit opportunites, don't macro/alternative funds look for experienced traders?

Feb 14, 2020

They do, but like I've mentioned, funds for the most part are not exactly performing anymore. Hires are down, investor money flowing out, funds are closing, etc. It's all related.

Feb 14, 2020

the illiquid deal based products are quant heavy structured products...which is generally why it is illiquid

Feb 12, 2020

Best thing, frankly, may be sales, if you want to set up for career optionality. Sure you may not have as much product knowledge (but you can certainly build it), or be doing the "sexy" stuff of making markets, making P&L, hedging etc, but your job is literally to meet people and convince them to deal with you/your desk. If your clients or other people at the bank or other banks or other areas like you, you can pivot out. Traders (and I have seen this) may have a much tougher time.

In short you are always interviewing for that next job. Your job is literally that.

Good Luck

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Feb 14, 2020

@Jamoldo

"...you are always interviewing for that next job. Your job is literally that."

Incredible peice of advice.

Feb 12, 2020

S and t is easy to love. Hours are good, but it can get very very intense during the day dealing with live trades and execution. Would do something in fixed income. Avoid equites

Feb 13, 2020
dv0123:

Hours are good
It can get very very intense during the day dealing with live trades and execution.

these are what makes trading the best job to have....good hours, an exciting day....and you can get paid gobs of money and not have to deal with any political shiite

i had a good trade overnight...mnaybe thats why i'm in a good mood =)

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Most Helpful
Feb 13, 2020

On politics I will respectfully disagree with @ironnchef

I was not the head of my desk by any means so didn't directly deal with any of this, but I saw and heard a lot. Trading desks are small areas...

The politics (shop depending) can be just as brutal. People stealing ideas? Check. People seeing MTM drawdowns to get fired/demoted, and then others to take on their book or cherry picking said trades at that low valuation and getting paid on "profits" the next few years (ie. recovery), check. Fights over attribution? Check. Power grabs? check. Constant flow of random, cryptic emails/messages from seniors? Check. Being told you are not up enough and need to double down when you are up, and being told you should have been short when you are down but still beating the market and your peers? Check. Management putting trades in your book (ie. it does well they don't pay you, it does badly - hey it's your book)? Check.

The market hours assuming you are in one or two standard adjacent timezones can be great. One can turn off and do other things. But if you are trading globally, forget it. You have to be checking in constantly and all the time. I know that I am ok with that and prefer that compared to waiting for some senior dude to send back comments on some stupid minutiae on a deck or model that is needed now, thanks. When the chances are that no one will ever see or use it.

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Feb 27, 2020
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