Yea Equity is shit. Actually FI is shit as well; I heard janitorial staff is the new place to be in banks now a days. If you did a bit of googling first you would realize there are about a thousand divisions in equities, each very different than the other. Some make more than FI some make less. "Easier to automate" WTF?

"Equities in Dallas"... that joke gets older and older by the year.


Remember, you will always be a salesman, no matter how fancy your title is. - My ex girlfriend

 
Best Response

i'll take a stab (from a flow trading perspective):

  1. easier to automate part is definitely true. many banks have electronic platforms making markets on them. and this doesnt only apply to equities, it also applies to spot FX and spot commodities. for mid and large cap companies, spreads are getting really narrow...

  2. not as complex. im not only giving equity shit here, again this applies to spot FX and spot commodities as well. less mathematically intense, no greeks or higher degree exposures to analyze. no durations no convexities. I wouldn;t mind trading equity derivatives for example.

  3. this reason will sound immature to a lot of people: trading equities doesnt seem "exclusive" and lacks a "cool factor". everyone knows about stocks, they are the most common asset class for retail investors. how many average joes know about CDS? FX forward? CMOs? IRS/FRAs? swaptions? a lot of us are shallow people and want our peers to be impressed by what we do.

  4. also an immature reason: lots of "stupid" people trade equities. i have nothing against stereotypical day traders but they don't seem to have a good reputation. how many day traders trade passthrus? how many of them trade total return swaps? people who trade more complicated securities are usually intelligent. what about people who trade equities/spot FX? some are smart as hell, some are really clueless and uneducated about finance.

yea, go ahead and talk shit about me, but those are the most common reasons IMO.

but if you are a successful equity prop trader or work at an established hedge fund employing fundamentally based equity long/short strategies, i doubt many people will talk shit about you.

 

"but if you are a successful equity prop trader or work at an established hedge fund employing fundamentally based equity long/short strategies, i doubt many people will talk shit about you."

What if you employ a a technically based equity long/short strategy?

"Oh the ladies ever tell you that you look like a fucking optical illusion" - Frank Slaughtery 25th Hour.
 
trade4size:
"but if you are a successful equity prop trader or work at an established hedge fund employing fundamentally based equity long/short strategies, i doubt many people will talk shit about you."

What if you employ a a technically based equity long/short strategy?

like the other guys said, as long as you hit the numbers, no one can do shit.

although the negative connotation of "daytrader" is driving me insane.

 

your so cool ideating. I only wish I could be as cool as you. Im very impressed by your maturity level, way to act like an adult. Maybe one day I can be as cool as you.

"Oh the ladies ever tell you that you look like a fucking optical illusion" - Frank Slaughtery 25th Hour.
 

When people are talking about "trading" they are talking about such a wide range of activities. People don't differentiate prop and flow enough.

flow equity trading is not usually the most desirable place for two reasons: small margins and more easily replaceable by computers because of relative simplicity of risk and liquidity within the market

prop equity trading is a totally different game. you could be running some black box technical strategy, or fundamental long short...no one will talk shit about you if you are making money.

For those of you tired of Equities in Dallas - it's still true today, get used to the "joke."

 

...their is nothing wrong with trading equities on the buy side. Do you think anyone makes fun of Stevie Cohen? On the sell-side there is a bit of a stigma because making markets in equities is less profitable and therefore the people who work there tend to be a bit less intelligent. Equity salesman in particular have a rep for being a bit slow. That said, plenty of salesman and traders make a ton of money on the sell-side in equities and one should not be ashamed to take a job in equity departments.

 
Bondarb:
...their is nothing wrong with trading equities on the buy side. Do you think anyone makes fun of Stevie Cohen? On the sell-side there is a bit of a stigma because making markets in equities is less profitable and therefore the people who work there tend to be a bit less intelligent. Equity salesman in particular have a rep for being a bit slow. That said, plenty of salesman and traders make a ton of money on the sell-side in equities and one should not be ashamed to take a job in equity departments.

Yea if you trade CASH equity, you might have a bit of a negative connotation. There are plenty of different branch in equity... Do you think the deriv guys in equity are a bit "slow" as well? Where as for cash being slow, in my training course the cash guys come from Oxford engineering and the like...


Remember, you will always be a salesman, no matter how fancy your title is. - My ex girlfriend

 

I would think that most equity sell side guys would eventually like to get on a prop desk or join a HF. A flow desk will give you experience and allow for a transition to that.

"Oh the ladies ever tell you that you look like a fucking optical illusion" - Frank Slaughtery 25th Hour.
 

Sell side equity trading is not related at all to buyside equity investing. No one moves from being a sell side equity trader to being an analyst at a l/s equity hf.

It is viewed negatively compared to trading other securities because most of sell side equity trading is agency based so the trader doesn't have to worry about a pnl or risk.

 

I really have to disagree on this. Based on the limited number of buyside traders that I know (>10) most of them started on the sell side. Think about all these people in the buyside. When you read their bio's you will see that many worked on the sell side prior to joining.

This also creates another paradox if sell side equity traders dont switch. Everyone knows its very difficult to be placed on a prop equity desk at a bank. So if you cant get into the buyside straight out of undergrad and you cant make the switch from the sell side to the buyside later my question is how is an undergrad interested in prop trading supposed to get into prop. Your suggesting that if your placed on a flow desk thats the end of your career exit wise for trading.

I ask this for others sake not my own situation as I plan to go to a prop shop straight from undergrad.

"Oh the ladies ever tell you that you look like a fucking optical illusion" - Frank Slaughtery 25th Hour.
 

Buy side equity trader usually = relaying orders to sellside equity salestraders (i.e. acceptable prices, % of volume, how to work the order) and not deciding which companies to buy or sell

Buy side equity analyst=contributing to the decisions of which companies to buy or sell

There are also a lot of different types of equity prop shops. Some are based on algorithms, some are scalpers, etc. Sell side equity traders would never move over to being an analyst at a a traditional l/s hedge fund.

Sell side equity traders work great hours though. Usually 8 to 430.

 

"fixed income can have better clients with more interesting investment considerations (think insurance cos, pensions, etc)"

nothing against you yesman, but i find the use of the verb "think" in statements like the above incredibly annoying.

as far as equities...i think there is a natural desire to be associated with a "hot" or "cutting edge" product. it's an immature thing, but it's out there. equities is not hot, and its not cutting edge. it can definitely get you paid though.

you can get paid in any product, and each product has its own unique set of required skills. unfortunately you cant really figure out the perfect fit from a message board b/c there are too many moving parts.

 

Untilted: I have to disagree with your statements regarding the similarities between cash equities, spot FX, and "spot commodities". There really is no such thing as "spot commodities", as far as anyone in S&T at an IB is concerned. True, there are spot prices, but they refer to the physical markets. While banks do trade in the physical markets, the vast, vast majority of revenue on the big commodities desks comes from the financial markets (if you come to a commodities desk as a new analyst or associate it is highly unlikely you will ever have anything to do with the physical markets unless it's part of a large structured trade). And unlike in equities, close to 100% of commodities trading is derivatives, because the focus is almost purely on the financial markets. Granted, some of these derivatives are pretty basic, like futures or swaps, but they are derivatives nonetheless. Also, if you're buying commodities futures you're not going to be dealing with the trading desks at any investment banks. Traders use futures to hedge, but as far as selling to customers commodities desks don't really deal in futures--they do sell OTC swaps that mimic futures contracts, but commodities desks these days have less of a focus on flow trading and more of a focus on more structured trades.

 

sorry about the 'think' jimbo, just a preference/habit...

all I meant was that in FI, we do a lot of duration and cap structure plays for clients that I don't think would be possible with equities - though we have collaborated with them before. I only ever did a brief rotation through equities and apart from derivatives, I didn't find it that engaging. but I will not deny that it can be a very lucrative business.

as trading - any product - is very dependent on your salesforce and their relationships, I'd stress that the bank you're at is vital as far as its rep for being an equities/bond shop.

 

skins what % of commodities at your bank deals in futures? Someone is trading a ton of CL and if you say its not bank customers then who really is trading it. Who sees the institutional flow for commodity futures?

"Oh the ladies ever tell you that you look like a fucking optical illusion" - Frank Slaughtery 25th Hour.
 

trade4size--that's a good question. For institutions that are putting on positions in actual NYMEX futures, they are likely going directly to the NYMEX for that, or using brokers. That's the most direct way of doing it--no reason to deal with a bank sales desks and to be honest the banks' sales desk don't really care about those sorts of basic trades.

That said, for all the people that are doing OTC swaps with the banks as counterparties, the traders at the banks are in turn hedging those, and I'd say that hedging can be done with both futures or with OTC contracts (usually on the ICE).

In general, as a salesperson or structurer at a top commodities desk I'd say you probably spend 10% of your time at most on flow trading (mostly OTC swaps on nat gas, oil, products, power, etc.), and the other 90% on trades that are structured or customized in some way. Of the latter, some may be customized swaps or options that take a few hours to put together, while others could be heavily structured trades that take weeks to put together.

I was very surprised when I first got on the desk how different commodities really is from the rest of the trading floor. Some of that is because of unique properties inherent to the commodities markets, and some is because the market as it is today is relatively new, and is growing and changing so quickly.

 

Oh man equities are boring tell me about it. This environment is a prop traders playhouse for printing money.

"Oh the ladies ever tell you that you look like a fucking optical illusion" - Frank Slaughtery 25th Hour.
 

I'm a prop trader at a small firm in south, fl and I love it. When I tell hot girls that I'm a trader they all wanna bone...They don't know the difference between prop shop, bb or anything....They just like my swagger...

Sincerely, BroadStreetBully --------------------------------------------------- "Everybody needs money. That's why they call it money."-Heist 2001
 

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