trader's job security and long-term career path?

hey guys, what is the expected career path for a trader 10, 20 or even 30 years down the road? do they really just do trading their whole lives? i heard that burnout's a big issue, because of the stress.

also, i've heard that trading is risky and you might be fired if you make big losses - but how often does that happen? i.e. if you WANT to be a trader your entire life but you're not very good at it and just about average, would you be able to remain employed for 10-20 years as a trader?

Comments (37)

Mar 29, 2011

Traders can follow several market oriented career paths
1. Management position within S&T (a head of sales/global head/mid-level manager)--assumes the desk head is still a "trader". These are more client facing roles and require you to manage traders and their risk--decide how the desk should be positioned, authorizing extremely large trades or positions, ect.

  1. Sales-Lots of sales guys used to be traders. Sales is sometimes known as the retirement track for old traders--they know the product, the clients, and can generally make close to what they did as trader without all of the stress
  2. Risk Management-Some traders move into risk management. This move isn't the most common (sales and management are very common), but I have seen it done.
Mar 29, 2011
Gekko21:

Traders can follow several market oriented career paths
1. Management position within S&T (a head of sales/global head/mid-level manager)--assumes the desk head is still a "trader". These are more client facing roles and require you to manage traders and their risk--decide how the desk should be positioned, authorizing extremely large trades or positions, ect.

My own experience with this is that there's several layers of management who are all traders. The desk head is a trader, and his manager is often a trader.

2. Sales-Lots of sales guys used to be traders. Sales is sometimes known as the retirement track for old traders--they know the product, the clients, and can generally make close to what they did as trader without all of the stress

  1. Risk Management-Some traders move into risk management. This move isn't the most common (sales and management are very common), but I have seen it done.

I can vouch for both of these tracks, as well.

Bottom line though is that there's not a lot of job security in trading, but your job security largely depends on how much P&L you generate. If you're making the firm money and the company isn't going bankrupt, only a fool would fire you.

i find that most kids who want to be traders have never traded and no amount of advice or suggestion will replace actually going out and diving into the deep end of the pool.

+1. I think most kids who want to be traders really want to be mutual fund managers, but watched Wall Street, Boiler Room, or Wall Street 2.

Mar 29, 2011

also, i've heard that trading is risky and you might be fired if you make big losses - but how often does that happen?

playing with other people's money requires success, so if you suck... quite often

if you WANT to be a trader your entire life but you're not very good at it and just about average, would you be able to remain employed for 10-20 years as a trader?

yes, but if you're one of those guys dragging his weight for 10-20 years you will likely eat, drink or drug yourself to death...your best move is to trade some monopoly money and then move on to real account (if you haven't already)...see how you do and whether it is for you

i find that most kids who want to be traders have never traded and no amount of advice or suggestion will replace actually going out and diving into the deep end of the pool.

Mar 29, 2011

asset managementtt

Mar 29, 2011

strategy as well

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Mar 29, 2011

InterviewBeast says...

There really is an expected career path for a trader, as so much depends on the individual.

For those who enjoy it, and WANT to carry on trading, they could;

a) Move in to a more senior management role (explained in point 1 by Gekko21)

b) Find an area of specialization, generally developing a key focus on either -
- the market making side, or
-the proprietary trading side - and just continuing to trade day in day out.

c) Move to the buy side, prop. house, hedge fund etc

d) Trade their own money/set up their own prop. business or hedge fund.

You also mentioned burnout being a potential issue and well yes, it is a very stressful occupation. Whilst some traders like the idea of getting in, getting paid, and getting out, those with a longer term view will often consider;

a) switching firms (as this includes a gardening leave period of paid unemployment between the 2 jobs - effectively the reverse of working your notice (typically 3 months))

b) switching product (within a broad product area (eg. foreign exchange), the skills are often very transferrable to other product, with just the nuances of a new market to learn (eg from fx forwards to spot fx)). This change can provide renewed focus and enthusiasm for the job)

c) taking a sabbatical (you may have to wait a while for this and pay your dues, but after proving yourself consistently, many firms would rather you take some time out than lose you to a rival firm)

In terms of losing jobs for losing money, well at a junior level this tends to not be the case, as long as you are operating within your risk guidelines and keeping your manager informed of your trades.
It also depends on your seat; if you are a market maker for a high margin product, there will be issues if you are consistently losing money, but in your first 3 months prop. trading, there shouldn't be any expectations of being millions in the black. All that said, at the end of the say it is a profit-motivated role, and repeated/excessive losses will eventually result in getting the sack. and yes, it does happen (though somewhat infrequently i'd say, based purely on anecdotal evidence)

Finally, if traders are not good enough/don't enjoy it?

Well again, a couple of common moves Gekko21 mentioned are to sales or risk management (particularly the former). This does of course assume they want to stay in the industry; some participants just take a couple of nice paychecks and go and pursue something completely different, such as enterprise, teaching or further study.

As you can see there really is no rule, but it is a lucrative career path for those who pursue it, whilst opening a lot of doors for those who do not.

Mar 29, 2011

SB to you, comprehensive post.

Mar 29, 2011

InterviewBeast says....

Many thanks, particularly as there was an error i the first line!

Should read..

There really is NO expected career path for a trader, as so much depends on the individual...

Regards

Sep 21, 2011

many thanks

Sep 21, 2011

none

Sep 21, 2011

^ You're being too generous, it might be lower than that...

Sep 21, 2011
farmerbob:

^ You're being too generous, it might be lower than that...

http://youtu.be/OBCoq0Cn-dk?t=24s

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Sep 21, 2011

Largely depends on how confident your superiors are in you and your ability.

Sep 21, 2011

Having just had my office closed on me, firing the whole team (we made good money I know the results), I can safely say its pretty insecure at all times. It's part of the reason the pay is so high.

Redundancy money rocks!

New job required PST

Sep 21, 2011

^ PM'd you

Sep 21, 2011

HAHA. Cant wait for the guys on the trading floor to hear this.

Sep 21, 2011

midget toss? wtf?

Sep 21, 2011

I shadow at the Chicago Board of Trade it is an awesome place. As much as the CBOT is an awesome place, I feel that floor trading is not very transferable and a lot of people at the CBOT tell me they feel that the CBOT will be gone eventually.

It is your choice, but a lot of traders there tell me to not go there because of this. I wish you good luck and I am a fellow non-target and feel your pain.

Edit- After thinking this over, if it was me in your situation I would stay where you are at. You miss 100% of the shots you don't take it and would always be second guessing yourself your whole life saying imagine where I could of been right now. It may not be the rational choice, but accounting jobs will always be there.

PS- Holy shit with the news today and the murder-suicide. My dad sent me pics he was outside the CBOT. And also that new NY style pizza place is pretty good.

Sep 21, 2011

Blackhawks, that's exactly what I've been telling myself...As much as I want a serious job, making a respectable salary, I do want to see what the possibilities are as a trader. I guess it's a risk I'll just have to take. No ragrets.

Where's this pizza place?

Sep 21, 2011

.

Sep 21, 2011

Just do what you enjoy, if you enjoy trading then go 100% into it. If trading evaporates then move to the next thing you want to do. Taking a job for a salary because the pay enables you to achieve your dream of owning a nice car will make you very depressed

Sep 21, 2011

I came from an IT background out of school and started on the NYMEX floor almost 2 years ago. I did bitch work and all that just like you but now I'm at a small hedge fund outside the building. They're options market makers, just like it seems the group you're with is at the CBOT. I'm currently thinking very hard about if I want to stay in the game or not, and I've set myself a deadline. I'm looking at possibly switching over to the physical side of the business to learn more about the diff energy products and do something new and interesting....it's hard man, there is no set path and I'm at a crossroads like you.

Working on the floor isn't necessarily the greatest place to be, but contrary to what many people would think, there's still some sharp groups down there and it's a great place to learn. ALSO, you'll notice after you have over a year or so of experience, it's easier to get calls from larger hedge fund/bank desks that you apply to....so keep that in mind. Just because you're on the floor now doesn't mean you'll always have to stay on the floor.

Also, you said you're afraid the floor will be extinct and you won't be able to go further with it. You haven't had enough time to really understand how everything works because the same stuff they're doing on the floor can be done sitting in an office with some turrets (phones) and an instant messenger. All the flow is going OTC, so yes, the pits may go but that doesn't mean you can't make markets through the IM and phones.

Is it a solid career choice and should you stick it out for years? Eh...Idk. I think ArcherVice made some good points, and it's the same thing that's made me set a deadline for myself before I 100% go on to something else. I think learning to trade on the side would be good like he suggested, however, the market making your group does in options isn't going to be transferable to your own personal account. As you know, you need good brokers and the ability to quote size to get in on the juicy trades for edge. But whatever, you can learn to trade futures or trade options in a more retail sense on the side.

Feel free to PM me, my group may know yours depending on what market(s) your guys trade.

Sep 21, 2011
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Sep 21, 2011
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