BuySide Execution Trader


Hi guys,

Need some advice/opinions here. I have been working as a Macro execution trader in a hedge fund (AUM somewhat above 500million) for the past two years. As it's a small setup, I'm thinking whether I should stay longer and request for a small portfolio to manage (I would say I have a 50-60% chance) or continue my career in execution trading at other multi-billion dollar funds with much bigger brand names

Some of my thoughts are:

- Even if I get to manage a portfolio, i'm not sure if I'll excel at it (or not lose money for that matter). Assuming my performance is average, I probably would not be making much more money than what I'm already getting given it's a small firm. The experience however would offer me more exit ops compared to execution trading.

- On the other hand, if I move to a big Asset Management firm (those with 100billion & above) to do execution, I'll get a nice pay jump with a big brand name on my CV, gain broader exposure to products and scale (think IRS, CCS, FRAs, CDS, MBS, FX NDFs etc) and get the opportunity to be promoted (current firm has flat hierarchy). Trading is however very stressful when the flow is heavy and one needs to be fast and error-free and this becomes more challenging when one enters his forties-fifties..

- Gaining experience in execution trading would allow me to work at some of the biggest money managers in the world as a buyside trader, but if I'm an average portfolio manager, most likely I won't be able to join those firms ever, as they tend to hire fundamental credit/equity analysts from other big AM firms/BB banks

If you were in my shoes, which option would you take? Thanks in advance for your sharing your opinions


Comments (6)

Jun 30, 2014 - 7:24pm

doesnt seem to be much downside to trying the PM job...even if ur firm doesnt let u go back to execution (many dont in order to discourage all execution guys from wanting a free option on a PM role) the experience would in my opinion make you more attractive as an execution desk candidate elsewhere, not less. You could say "they liked me enough to allow me to try to be a PM, but it didnt work out and i realize it isnt for me...but the experience taught me xyz about being better at execution, handling PMs better, etc etc".

So i would take the PM job, but i do think if u do it you will need a bit of an adjustment in terms of mentality..."I'm not sure if i can make money" should be more like "my goal is to make X amount of money and here is my specific, concrete plan to make that goal a reality". Dont start until you have realistically thought about this stuff...what are you going to trade (very specifically), how many trades per year/month/day, what is going to be your plan in terms of stops both on individual trades and for the full portfolio, how are you going to manage successful trades, how are you going to size trades, what is your daily research/idea generation process going to look like (literally hour by hour on a typical day), given drawdown tolerence what is a realistic return goal, what sharpe ratio is realistic, etc etc. Write a really detailed trading plan as if you were pitching a sophisticated investor even if one isnt required (it should be). I have seen execution guys go into PM roles and it almost always fails (like 90% failure rate in my experience) because they start swinging before they have thought about this stuff enuff...they have a million well-informed trade ideas, but by the time the dust settles and they realize that the process (which they didnt have to consider in execution) is the most important thing they are already finished/stopped out/in extreme psychological distress. So if you are going to do it, give it a real honest shot, dont cheat yourself of this chance have ...many work a long time and never get this break.

Jul 1, 2014 - 2:01am

Thanks guys for sharing your opinions, especially Bondarb for your detailed suggestion on coming up with a concrete proposal. I think that's a great idea and very sensible. May I ask what do you do on the buyside?

I guess I don't really have much downside other than forgoing the opportunity to work in bigger brand names and a pay jump for the year ahead. Probably going to continue with my CFA level II exam next year, since I'm already on the buyside.

Apr 9, 2015 - 8:19am

Hi guys, please allow me to rephrase my original question (reviving this thread as i just received my bonus). i've been working as an execution trader in a fund for a couple years and i'm thinking of proposing to my boss to manage a small portfolio (but main role would still be execution) i think the odds are good but i'm slightly hesitant as it is not easy working for him as he can be quite unreasonable on many occasions. So the question is, if you were me, would you request for a small portfolio to manage, under a douchebag boss who calls you to trade when on leave, during lunch, at night at times (just 1 example), or would you move to a bigger name fund with big flows, get a pay raise and continue with execution trading? My current firm is small, pays decent but the boss can be unbearable at many times and there's no promotion prospects due to flat hierarchy. Many thanks for your opinions and advice!

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