Doing Personal Investment While Working as IBD Analyst
Not holding high hopes of getting rich just from bonuses in this day and age.
Surprisingly, most of my colleagues just let cash sit idle in bank accounts and rot by itself, and few had any investment experience at all.
So anyone out there who have made/making a significant side income from doing personal investment?
Key questions:
- How do you find time to research/diligence your investment ideas and targets?
- Any benefits in terms of skill sets by working in IBD (not insider information/trading)?
- Books/websites/forums/discussion groups you recommend for the purpose of developing and improving investment skills?
I think insider trading is the only way to go buddy
Depends on the jurisdiction you work in though LOL. I know many people working in PRC trades MNPI on a daily basis and pretend nothing happens... But unfortunately I sit in a country governed by law, and have no choice but abide by it.
I work in a coverage group, so hours suck more than in DCM, but generally it comes down to 2 things to explain why I don't actively invest on the side: (1) it's such a hassle to deal with Compliance re: approval of trades and (2) when I have precious free time from work, you have to put a gun to my head (or a buyside job offer) to make me read another 10k / research report
+1
Similar position to Ezio.
I like investing and thinking about ideas and macro themes but when I get free time generally the last thing I want to do is sit down and read k's and q's.
I do hold a number of positions which I have put the graft in for that have done well but I always get the nagging feeling that I just got lucky.
Sure I had a coherent thesis and did some digging in my spare time but the guy I bought it off is probably doing this 60 hours a week to feed his family. Makes me think in the long term an index tracker might be better (not that I am saying markets are efficient).
If fundamental hedge funds who devote their entire being to outperforming the market cannot do so, then there is no way an IBD analyst working 90-100 hours will.
After you've maxed out your IRA contributions, your best option for long-term wealth generation will be to just dump it into a dirt cheap S&P500 fund and leave it for retirement.
What should you do if your salary exceeds the IRA contribution limit? Apart from maximizing your company matching for a 401k, would you recommend opening a brokerage account and regularly investing in low expense ratio broad market index ETFs through dollar-cost averaging and passive investing?
The perversity of banking life is that I'm much better at spending time and effort protecting my bank's balance sheet than my own.
So I generally take sector positions through ETFs (eg IXJ & PSCH) where I've got a positive view on the sector. I've also got a handful of companies in my portfolio that I've researched, put up to $10k into each and monitor (when I have time). $10k represents the amount of money per name that I'm willing to effectively gamble, as I don't spend as much time as I should monitoring my portfolio and those individual name positions are all long term plays rather than looking for event driven pops. I mean, I've got the price, vol and movement of each position live on my screen all the time, but I don't have time to read research as much as I should.
I'm lazy and just stick a bunch of money in a robo-investor (Ex: Schwab Intelligent Investor, Betterment, Wealthfront). No need to do stock picking and not having to deal with compliance to clear trades is nice.
I'm curious about this. does every single trade you do have to be compliance approved? or, do you just have to have your accounts monitored? I have some controls but basically the rule is just that I can't front run client trades (even though at my volume, it wouldn't matter)
I'm not 100% sure on the details, but I know there are some stocks we cannot trade at all, while other stocks on a designated watch list need prior approval (I think any stock covered by research?). I think that's how it works, but basically I don't want to deal with the hassle.
In my case, every single trade. We have an automated system where we punch in the trade we want to do. It will check the name against the division-specific "no trade" list, then give me clearance or rejection.
We have to get all trades approved through compliance and have a required 15-day lockup period. We also are not allowed to have a brokerage account anywhere else (except in very unique cases) and our transaction fees are outrageously high. I have a few individual companies but stick mainly to the mutual fund / etf universe
Avoid the compliance headache and pay someone else to invest your money.
Why the F did you get a monkey shit for this?
I don't know why this would get that. I think it is from someone who has never worked, let alone work at a large investment bank.
I work at a BB American investment bank, and the restriction and timing requirements are such a headache. Most of the higher ups in my office just have passive management.
Tend to agree with most of you that a passive approach is most doable for us from a allocation of time/efforts perspective.
But if everyone just denies him/herself in the first place before even putting any additional effort, how is he/she able to differentiate him/herself down the road especially with aim to land on a buy side gig?
A question is - how does your current position, in particular the skill set you develop and use on a daily basis, would help your investment process, e.g. in terms of understanding the target business, etc
PS: regarding dealing with compliance, at least in my firm, I just submit a request to trade xyz, and I'm either approved or rejected (I work in a small firm so unlikely to be conflicted on the majority of the listed universe). Never spend time to argue back and forth...
I do practice personal investing while working long hours (no insider trading). I use an excel spreadsheet linked to our data provider (Cap IQ/Bloomberg), which pulls the data I need to make an investment decision. After I identify 20-50 companies I like, I start digging into details (10q/10k and etc.). I am looking for cheap companies with strong balance sheet. I recommend reading Benjamin Graham and Peter Lynch books. Also Seth Klarman wrote a perfect book about investing in general.
You can download Klarman's Margin of Error online; just use a google search.
Margin of Safety...
I'm in ER, so I probably have a slightly different mindset than the average IB analyst, but I actively manage my PA with individual stocks. To be honest, when I talk to an ER associate and they say something like "O, I don't own individual stocks" I tend to think that they're in the wrong line of work. In my experience, those that take time to actively invest their own money in stocks tend to be better ER associates because they actually care about the market, and that makes them better at their job. For IB analysts looking for a hedge fund exit, it seems like a no brainer to me to either make your own bets or run a virtual portfolio if your compliance restrictions make it too difficult to own individual stocks.
Our holding period is 30 days for individual stocks. Yes, it sucks. Trades have to be pre-cleared unless it is a broad-based index. The rule is almost always that you can't own anything you cover or anything that falls under your subsector even if you don't cover it (if you cover semiconductors, you can't own any semi stocks even if you don't cover the name). Some places are more strict, and would make it very difficult to, or even restrict your ability to own any kind of technology stock...
Work in a group to diligence your investments (with friends or family).
Depends on which group you work in. When I was in a BB M&A group, all trades are restricted (and your compliance officer will give you the evil eye if you ask for authorization to buy a security). We really just invested ETFs and passive funds.
At the end of the day I guess it comes down to what you value more - free time to spend on non-investment related hobbies or free time to spend on investing. Being in ER my hours are naturally better than IB so I have more disposable time. Perhaps I'm biased in that regard. But it stills come down to whether you want to and are able to actively invest well on your own. If you don't want to develop that as a hobby/passion then it's probably better to regularly add to passive funds/ETFs or some active managers that do well through a full market cycle. If you do want to develop it as a hobby/passion then I'd recommend starting with books. An above poster mentioned Graham, Klarman, and Lynch. I second that. You'll have to read a few different books and think about your personality in that light in order to get a better idea of what kind of investor you are. The two overly broad camps are of course growth and value. I think those camps are far too generic but if you read a few books like Lynch's One Up on Wall Street, Graham's The Intelligent Investor, and one or two others then you should get a better idea of what general investing style may work for you. I can suggest a number of books to read if you would like but there are also numerous other lists on this site that you might as well just search for.
There's nothing wrong with passive investing. It guarantees you average returns, as long as you don't let your emotions get the better of you. If you want to do better than that, and if you actually can, then you will need to spend a lot of time learning and practicing. Better to start practicing with smaller amounts of money earlier and to learn from your inevitable mistakes now than to wait until later in life and make the same mistakes with much more money.
Investing is a life long learning process. It is challenging but rewarding intellectually and financially. That should be your focus at this point as it will likely take a number of years to create a large enough portfolio to provide meaningful supplementary income. And you can do that either passively or actively. Passively will probably take you longer. But that's your decision.
Oh, I forgot to mention the restrictions thing. Naturally, every firm is different. As long as you aren't trading in and out of names then it shouldn't matter that much. In ER at my firm I have to get all trade's pre-approved for those in my household (my wife and I). I also cannot invest in companies that my team covers. I can invest in companies in our sector but there are limitations there. We don't have a minimum holding period though but that doesn't really affect me since my holding periods tend to be ~3 years anyways. At an old firm though we had a 30 day minimum holding period.
check out "Security Analysis" by Ben Graham, it's the value investing bible.
If you have time to start a side business, you need to pay more attention to your core business--- only the all or nothing guys make it, so pick one--- get focused and not distracted--- all perosnal dollars should go in to Berkshire H.
I disagree about this in general even if I agree with it in this current context. Tons of analysts volunteer, do some kind of sports, read a ton of non-finance stuff, or do "side hustles" that aren't full-blown startups while still killing it in the office
As a long-time M&A banker, I found it just wasn't worth the hassle. We had multiple watch lists and compliance approval was required for every trade. Then if you got really intensely involved in a deal (what deal isn't intense?) and had to travel a lot, you didn't have time to follow the market. Nearly every one of my partners put their money into an index fund.
I don't understand what the big deal with the "compliance hassle" is - at our firm there's an online website where I just put in what trade I want to make and it instantly approves/rejects it (in under 30 seconds). I've never spoken to a human from compliance. We have a 60 day holding period though. (I work at a large asset manager in NYC).
I've heard the best investment strategy to make some extra cash is to trade options on the VIX. The VIX usually reverts back to its mean over time. So if it's trading above its mean buy some puts. If it's below its mean then buy some calls. Pretty good investment for young bankers with excess cash and willingness to take on more risk. Also doesn't require much of your free time for due diligence.
Full disclosure: I've never traded on this investment strategy so take my advice with a grain of salt but have heard its a pretty effective investment strategy for younger investors with cash that are willing to take on more risk.
why not just buy the XIV? same idea except it also makes money if volatility stays level
Yeah I do trade XIV and has worked well so far.
Due to compliance issues and the lack of time, most bankers just go with index funds, ETF's, and/or mutual funds.
I asked a similar question in the RE forum and got NOTHING! Couldn't believe it really..until I am making a million bucks a year or whatever, I am not going to wait around. I do small time RE deals out of the day job which effectively can easily double my total day job comp. Why don't I just go do that full time? I guess I like the guarantee of a pay check and*almost guarantee of bonus as a base. So unless I can get way more in day job comp and not have to do side stuff, this is how it is
Working at a I-Bank... Close all other accounts? (Originally Posted: 07/08/2015)
Hi guys,
I've been browsing the forum for a while now and decided to post my question since I can't seem to find a thread that addresses this. When you get a job at an I-Bank, do you have to close all of your personal accounts with a different bank that you use (and move them to the bank you're employed at) due to insider trading concerns or just general company policies?
Thanks in advance for any insight on this.
No.
Similar question - what are the usual rules about trading on personal accounts when working in IBD?
For us we had a restricted list and had to send quarterly reports for brokerage accounts. Also trade request had to be approved by compliance.
It varies by bank, most BB swill require you consolidate all brokerage accounts within their system. Some will allow an outside account at an designated brokerage firm, but not all will (can't speak for any of the MM or EBs). Regardless, you will need compliance's approval before executing any trades. Most banks will also have a minimum hold period (usually 30 days before you can sell)
Hi ,,
It depends upon your bank strategy or your bank policy, some of the banks will not allowed to open your personal accounts in another bank but you must required an account in your bank where you are the employee.
Any holdings and accounts you have before you start your job are unaffected. There is no need to sell off holdings or close your accounts.
Once you start your job, however, your ability to trade will depend on your bank. Usually you will disclose all your trading accounts to compliance and the banks have programs which allow them to monitor your trading activity in said accounts. For the most part, you are allowed to invest your money wherever you want (including individual stocks) as long as the compliance department gives you the sign-off (e.g. the stock is not a client or on a watchlist/blacklist etc). As some else mentioned, a lot of banks will have a minimum hold period (~30 days) - so no day trading.
I'm not sure about all the BBs, but I know GS (for example) is pretty strict and doesn't allow you to invest in individual stocks (you can only invest in a list of pre-approved ETFs/securities).
If you happen to hold a security from your pre-employment life that is a counterparty in a deal you end up working on, you'll usually have to disclose this to compliance during the new project/deal approval process, but it shouldn't be an issue (i.e. they wont force you to sell)
contact your compliance team.
The situation in Germany/Europe is pretty similar. No bank would require you to close your account, although you will have to disclose all your accounts (even for internships). There’s minimum holding periods (I think 30 days, but don’t quote me on that, and definitely bank specific) and compliance pre-approval. I’d when you’re working for a BB, most of the blue chips will not be available for yourself, so you’ll end up with ETFs or something close. And of course, you can always buy your company’s stock – if you dare
What about algorithmic strategies? Would I be able to continue using them? Average holding period
if you're doing this, I'd question how much time you're spending on your actual job versus trading your personal account
I don't have any restricted list since I work with government bonds. However, I have to put a trade request a day before the day I want to trade. In addition, once the request is approved, I have only 2 days to implement the trade. After those 2 days, my permission expired.
At most places, you'll be allowed to have accounts at other banks, but they'll have to be held at certain designated brokers that will allow your company to monitor your account electronically.
Best to ask just compliance
The firm I work at has a 60 day holding period.
Personal trading while doing IB (Originally Posted: 09/06/2011)
What are the rules and restrictions on personal trading while you're an IB analyst?
Get your 3 different pitch books done by 5 a.m first plz?
are you allowed to trade stock as an investment banker (Originally Posted: 03/03/2008)
Hi all, can you please give some advice to a prospective monkey? I am joining a BB full-time later this year. I would like to buy some stocks now as valuations are attractive. However, are there conflicts of interests issues once I start FT at the BB (as in some of the stocks that I want to buy now may be clients of my future employee)? Would I be forced to sell off all my stocks once I start work? What's the policy on this issue?
As long you're not acting on insider information you'll be fine. From what I understand, once you start you'll have to reveal your holdings; just don't do anything illegal and you're fine. You obviously can't purchase/sell a stock when you have privileged information.
i heard trading the stock of your potential takeover target is a really great way to make money...
Yeah they make you disclose your holdings when you join as well as the holdings of immediate family members sometimes.
Usually you have to switch over accounts to something they can monitor, and sometimes you have to disclose holdings as well.
Also you can't be an active trader - there are required holding periods and it's almost impossible to flip a stock because you have to request permission to buy and sell.
Sometimes you can be restricted from either buying or selling a stock if the firm is advising it in some capacity... that can actually be a real danger because each bank covers so many different industries that you never know what will happen.
My advice is to just buy index funds and ETFs if you do anything at all... it's a huge pain to monitor individual stocks closely as an IB analyst as well. I've seen friends get screwed by some of the rules mentioned above.
At banks there are levels of restrictions on trading. There are stocks that are restricted by Industry group, by vertical function, by all of IB, and sometimes bankwide. The hold period varies by bank, I have seen as low as 14 and as high as 30 day. In addition, usually you have to submit a request to trade each stock which is good for a fixed period of time.
If you are in an industry group a fairly accurate rule of thumb is that you won't be able to invest in any companies in that sector. However, you could invest in mutuals and ETFs that only cover companies that you are advising deals on (if you so desired).
I agree with dosk, keep it to index funds and mutuals that have a focus you like. You can't get in and out of stocks in a timely fashion and you won't really have time to monitor your investments anyways. Go for the long run, otherwise you should've been a trader.
I was in an industry group and just to make it simple, we were restricted from trading in any stocks that could be potential clients of ours (i.e. the entire industry).
Dosk, PowerMonkey and Gametheory,
Thanks for your replies. I am looking to invest long-term (I do fundamental analysis of the stocks and will only sell when it reaches the fair value). I am not looking to flip the stocks regularly and I don't think I need to spend too much time monitoring the stocks given my investment style. Does this mean I am fine with the rules - I will buy the stocks now, and then ask permission to sell the stocks at the right time.
And I will be in the M & A Group and covers all industries. Sheesh does that mean I can't buy stocks of any industry :(
Buying and Selling Stocks as an Investment Banker (Originally Posted: 04/26/2016)
I'm sure this will be explained to me at some level when I go through FT training this summer, but i thought i'd see if WSO could give me a run down first.
My question is: What restrictions do you have on buying and selling stocks while working in IBD? I know there are certain things you can and cannot do, but i'm not entirely familiar with the specifics. Are you simply not allowed to actively trade? If you're more of a value investor and plan on holding a position for a longer period of time, can you do that? How long do you have to hold a position before you sell, and who do you have to get approval from?
Any insight would be much appreciated.
At my BB, I believe every trade needs to go through compliance. So you can obviously go long on stocks but it's not like you can just sell right away if something goes wrong. Just seems like a giant pain in the ass to hold anything IMO
It's not worth jumping through all the compliance hoops, to be honest. At my BB, every trade needs to be approved, you can only hold long positions, minimum holding period is 2 weeks, and you can only trade through a small number of white-listed brokers. You're probably going to be too busy with your job to be able to do any decent amount of research on stock picks, as well.
Anything your bank covers is pretty much off limits, trades need to be approved by compliance, and theres usually a set of ETFs that are fair game (usually cover broad markets). Honestly, it's not worth it, you're not going to have the time to do any formal research anyway.
Honestly it's not worth it to deal with compliance. I just do ETFs.
there was a thread within the last month that answered a similar question. It obviously varies by bank but all trades will have to go through compliance, there will be a holding period and if your firm offers personal brokerage accounts you will probably have to trade through them
I understand all firms are different, but I'm not sure what these other guys are talking about... Anyone who is deterred from making personal investments because of compliance regulations is just putting themselves at an unnecessary disadvantage. In my experience, it's pretty easy to trade regularly whether it is an individual name, mutual fund, or ETF.
My group is behind the wall so maybe we're viewed differently, but unless someone in my group has gone private on a name recently I don't have too many restrictions... It takes 2 minutes to enter a trade into my company's compliance portal, they email you 15 seconds later with approval/denial, and then you have until market close to trade it. I know it's not a crazy amount of trading, but I've made probably 60 trades in the last 2 years and I've never gotten denied. My firm has a 60-day minimum hold if you are selling at a gain, which can get annoying, but it's still well worth it. You can sell at a loss at any time.
Thanks for the insight guys. I suppose ETFs are probably the way to go, as it appears they're easy to get through compliance, and i really wont have time to do any real research.
Also, i'd assume i don't have to worry about the funds i'm already invested in through my Roth IRA, correct? Since its managed by my financial planner, would I have to ask for approval on any moves he makes?
What others have said around the procedure are true, but I disagree with the idea that it's not worth the hassle
Yes, if you're trying to go Bud Fox and make multiple trades per week as a 'trader' it's not worth it (and you probably don't know what you're doing), but doing a few trades once a quarter to recalibrate your portfolio with major companies that don't require a ton of research (i.e. Dow jones companies) is a good idea
Is the compliance process similar for trading options? I usually write covered calls on my long positions am wondering if there are any additional compliance hoops/restrictions to go through at BBs.
That fact that you would spend 10 minutes typing up this question is concerning... for what purpose? You want a bunch of anonymous people unfamiliar with your bank's policy to tell you what to do? Should have taken the 10 min to speak with compliance and gotten the actual answer.
I wouldn't be working in IB if it took me 10 minutes to type up this question.
Any large investment institution is going to have employees covered by compliance rules that require pre-clearance and ones that aren't. You'll be one that is. If you're in IBD, odds are phenomenally high that it'll be a pain in the ass to buy anything other than potentially commodities/mutual funds/ETFs. Along with the hours you'll likely be working, I wouldn't even bother with it. If it's an intellectual interest, just put together mock portfolios.
I'm in a similar position as the OP. Let's say hypothetically I have an algorithmic trading setup that runs autonomously. If I turn it 'on' before the start my internship and then leave it alone for the summer (or in the care of a partner with whom I won't communicate, so he can shut it off if it somehow starts losing money), would I still need to get the trades pre-cleared?
Can Banking Analysts trade individual stocks? (Originally Posted: 01/16/2015)
I have a brokerage account with a few stocks in it and am wondering what the implications for me of entering banking will be. Will I be able to train individual stocks that I have no involvement with at work? I am hoping to enter the hedge fund world after my stint in banking and would like to maintain a personal account so that I can learn a bit more about investing on my own.
You can, but there may be restrictions such as minimum hold periods, disclosing all accounts and trades, getting clearance before every trade, etc.
Depends on the bank, but as an example, 30 day minimum holds, full disclosure of all trades and a restricted list of securities that are not eligible to be traded.
I know GS recently banned IBD employees from investing in their own accounts:
http://www.ft.com/cms/s/0/a327e6be-45c8-11e4-ab10-00144feabdc0.html
Once you start studying for the Series 79, you will learn about restricted and watch lists. Banks have lists of individual stocks that are not allowed to be traded and other lists of individual stocks that must be approved before being traded. For most analysts, myself included, the hassle is just not worth it.
At most IBanks, you can't trade any equities. (assuming when you say trade you mean holding periods shorter than 30days). You can however trade ETF's. If you plan on continuing to trade your PA a little on the side, I would start looking and learning about ETF's now. Here's some good ETF's starting out: IWM, GLD, TLT, QQQ, SPY, DIA, IBB, XLE, the ETF's don't have nearly as much upside (and downside) as actual stocks.
Also they are pointless to trade IMO, unless you are trading options on them. Actually IMO anything is pointless to trade if you haven't first looked to see if the options on the underlying are liquid enough....
What happens if you come in owning a bunch of stocks? Would you generally be allowed to hold those or would you be required to liquidate ones on the banks list?
Will I be forced to sell all my stock when I start FT? (Originally Posted: 05/18/2010)
I did my internship my soph and junior years with BB's and learned that full-time employees on the private side of the Chinese Wall must have their personal accounts with the in-house brokerage/private bank (e.g. Goldman PWM, MorganStanley/Smith Barney, etc.). For example, the other IBD analysts this past summer told me they weren't allowed to trade much of anything but mutual funds/ETFs because of all the regulation and risk associated with insider information flowing from coverage group to coverage group.
SO, since I just graduated and am starting full-time soon in IBD at a BB, I'm wondering, when they transfer everything over, will they will force me to liquidate my investments in common stock?
For example, I own stock in XYZ company. Am I not allowed to own any stock in XYZ (even though I bought it before I could have had any insider information) because I could potentially overhear something that would allow me to sell before the info hits the street?
I have a couple positions in some stocks that I know will take a while to recover. However, I would very much prefer to hang on to the exposure. So I'm worried that I'm going to get hosed once I start this summer because I'll be forced to sell out before the next few earnings announcements.
I'd really appreciate anyone's experience with this. I'll ask the people at my BB eventually to make sure, but it usually takes a while for me to get an answer from them, and I wanted to know what was common practice on the street generally.
you will have to disclose your holdings and transfer your brokerage but you can keep your stocks. You can still trade but with certain restrictions: Every time you want to trade you need to pre-clear it with compliance. If this stock is on a trading desk of your firm that day or there is some big deal between your bank and the firm, you won't get the clearance.
There will be a specific min. holding requirement (usually 30 or 60days) but if your stock goes down by 20% (depending on the firm) you can sell it without permission.
It usually takes 2-3 hours after you submit a request to hear back from compliance.
As you can imagine, because of that I haven't trade that much.
there may also be blacklisted stocks at your company. i'm not 100% what this list consisted of but i'd assume they were firms that had pending deals or something like that
thanks - that makes sense. good to know that i won't be forced to liquidate when i get to FT
Are you allowed to formally pay a PWM / fund manager from another firm to manage part of your money under their formal agreements - i.e. joining their client list?
Signed with an Ibank...what can I trade? (Originally Posted: 11/20/2009)
Can I still buy puts/calls on their stock?
yup... when u start to work for them they will educate u on this issue and make you sign papers... it's OK right now
Trading as a Banker? (Originally Posted: 02/28/2013)
Does anyone know if you are limited to trading your own brokerage account if you work in i-banking? Obviously you can't trade the names of potential deal clients, but can you still trade companies you have no inside info on, or do you need to hire a broker?
Yes. However, you have to trade through your companies approved brokerage company, will have to disclose your account, and rest assured your account will be highly monitored. I've even heard of some companies having policies requiring a disclosure to compliance of all trades above a certain value. Best to check company policy on this -- not a strange question, most bankers have e-trade accounts.
As you noted above, you will also have times when no trading in certain companies is allowed for obvious reasons.
Talk to your guys over at compliance. Different rules for different banks.
we have restrictions based on trades made within a week of personal trade date, as well as value related trades (i think over 10k)
It obviously depends on the firm and if you're 'over-the-wall', but you likely can't trade in anything in your own industry (ie if you cover E&P you can't trade anything in E&P), most trades require pre-approval from some person (business manager, compliance, etc.), and you'll need to hold the shares for a minimum amount of time (ie no day trading). Everything needs to be reported and will definitely be monitored.
Everything will be monitored and some firms have "minimum hold times" that limits your ability to trade short term i.e. any stock you buy must be held for at least 7 days before being sold (same goes for options). In addition to that, some companies require you to report any buys or sells in your account to compliance as well.
For me (sellside research): Disclose accounts, compliance gets reports for all trades. I can't trade anything in my own sector or closely related sectors (for instance, a regional banks analyst still couldn't buy JPM or BAC). I have to get pre-approval for trades, but it is normally pretty fast (~1 hour).
In IB: You disclose your accounts, disclose your trades, must receive compliance approval for every purchase or sale of securities, and must hold all equity investments for longer than 30 days.
Exactly this, and there are bank-wide restricted lists as well but they usually include penny stocks or international tickers. Sometimes they don't even let you buy other financial institutions just because they say so.
Case by case basis. But for that instance you would need to dump your position as it relates to your industry group, reading the rule now.
Anybody want to add color for previously held positions?
Let's say I own WFC, but then get a job at GS FIG? Do I need to dump my position in WFC?
Good question OP I've wondered about this. I have an add-on question: how many of you working in IB have the time to actually read up on companies and make informed trades?
You have plenty of time to read up on companies, that's practically your job. But the atmosphere is just too restrictive to promote a great deal of individual trading. You're best off just putting your money in index funds while you're in banking.
In addition to the above, the bank that my friend works at won't allow short positions unless they serve as a hedge. Pretty sure other banks are the same.
Cannot trade any stocks related to the sector I'm in (coverage banker here). Every time I want to buy / sell something, I need to request a permission from several people. I generally submit 1-2 trades / month, so it's not a big deal.
Someone asked about previous positions. If you own WFC and started in a FIG group at my BB, you are stuck with your position.
When I was in capital markets, pre-approval necessary for every trade unless an ETF or government bonds. No trading single names on which you work, though if a client was someone else's, it was okay (i.e. if I worked in energy capital markets but I was not the junior analyst on BP, I could trade it). 30-day min holding period on stocks, 7 days on ETFs, no holding period on gov't bonds. Your own firm's stock is only tradeable in designated windows and absolutely no shorting of it.
Then of course there are restricted lists which means nobody at the firm can trade them, for whatever reason.
All the restrictions pissed me off after a while; it started to make more sense to get 3x+ leverage day trading govies.
Do bankers trade ? (Originally Posted: 01/21/2010)
I was wondering if investment bankers trade on their own ? I know that there isn't much time to trade but maybe long term value investing is possible ? By the time you are an analyst you must be good at trading... so do you have a personal portfolio ?
If they could, they wouldnt do i-banking, they'd be traders
" By the time you are an analyst you must be good at trading..." This is dumb.
Et sequi quidem animi assumenda. Iste voluptatem eligendi ea odit.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...
Ea ut fugiat ratione. Perspiciatis consectetur quam voluptatem est sapiente. Voluptate occaecati adipisci nam itaque earum labore dolor. Aspernatur voluptas ut error. Neque error libero voluptas aliquam alias. Et atque deleniti maxime sit vel error et illum. Corporis reprehenderit saepe officiis odit cum.
Error beatae velit velit ut iusto reprehenderit quas. Qui vero officiis dicta et autem placeat. Quas labore animi ipsum.
Deleniti deserunt aperiam distinctio mollitia voluptatem enim. Optio illum nihil explicabo quia sed ex.
Laudantium vel animi at qui distinctio. Necessitatibus ut fugiat quas voluptatem in. Corporis hic natus voluptatem dolore doloremque voluptates. Temporibus et hic et quas accusantium. Voluptatem quod doloribus officiis. Cupiditate quae ad eos molestiae.
Debitis laudantium praesentium impedit quidem ea sed. Ducimus consequuntur cum dolores doloremque vel.
Voluptas voluptatum et explicabo vero nulla molestias quasi. Ut aut qui soluta et tempora. Molestias placeat nam nostrum dolore exercitationem et et.
Sit unde impedit quasi ut in. Accusantium ad molestiae quia saepe eius. Quis ab laborum quod.
Expedita quis eius ad dicta repudiandae quisquam. Sint fuga aut ex dolor perspiciatis officiis. Et dolorum qui odit rem iure culpa eveniet.
Et quae ducimus nesciunt quia id laboriosam omnis. Nobis voluptatem omnis voluptatem et nobis. Dolore ipsam quis alias et omnis. Qui officia eum possimus et dolor doloribus. Laboriosam reprehenderit nihil aut ab et sed reprehenderit sint. Omnis aut autem et eum eligendi fugiat aut. Delectus necessitatibus non consequatur vel doloremque tempora assumenda velit.
Sint dolore accusantium debitis enim. Quisquam neque ut qui autem tempore laboriosam corrupti.
Magnam aut porro inventore qui quo accusamus. Nobis voluptatibus esse et similique voluptatibus delectus quia.
Repellat aut cumque voluptatem sed dolor voluptatem. Voluptatem placeat fugiat quia eligendi optio animi. Ut pariatur deserunt dolore dolore quia totam. Praesentium beatae ab beatae et.
Dicta possimus provident aut deleniti facilis nulla asperiores. Facilis libero deleniti asperiores consequuntur. Soluta odit maxime eaque doloremque asperiores blanditiis aut.