I am very interested in becoming a trader. Could anyone post about the career path of a trader. And how many years on average will they be in that position until promoted?
What is the Career Path of a Trader?
The answer to this question is different for different types of firms. Trading itself is the career path, but traders will hold different positions during their time at a company.
Trading at Sell Side Firms
Sell side firms such as Bank of America, Goldman Sachs, and Morgan Stanley have large, prolific sales and trading arms that have hierarchical levels just like the investment banking side of the business in which analysts become associates who then become VPs, Directors, and finally MDs / Partners.
Many firms have something similar to the following:
Analyst->Associate->Vice President->Director->Managing Director
(Vice President, Directive/Executive Director can all be the same "level" depending on the firm)
You can see a sample hierarchy below - however, in most cases an MD will between VP and group head.
Proprietary Trading Firms Firms
Prop trading firms are much flatter in structure and therefore reward people with money rather than titles.
Prop trading firms: assist trader -> trader
Once you're a trader, there won't be any more promotions in terms of position name. you will continue to get salary raises and your bonus will be dependent on your's or your group's performance. very flat hierarchy.
Career of a Portfolio Manager
The career path of a PM is more of a journey and much less of a structured path as there are many ways to get to the point of running your own book for a firm.
On buyside there are all sorts of jobs where the person doing them probably wants to run money/trade himself one day. Everything from research analysts who crunch numbers, to strategists that usually focus more on trade ideas or portfolio management, all the way down to trading assistants who book trades and middle-office guys who make sure they settle right. Every one of them along the way sees themselves as one day making "the big call". Of course most never will. There is no one career path but I can give u mine...
back-office/reconciliation----> Trading Desk Assistant-----> Assistant Trader/Analyst---->same but with more of a strategy bent...ie less running numbers and more coming up with ideas, advising PMs on position sizing and risk management, etc.---->managing my own money/balance sheet (and also still acting as a strat for other guys on my desk)
Once you get to the point where you are managing money then promotions have to do with capital and autonomy. But that doesn't mean those aren't promotions...a young PM with tight risk limits has a lot different potential to make money and a much different job then the guy who runs the fund who is allowed to take as much risk as he wants and doesn't have to answer to anyone. Also more senior PMs will be the ones who interface with investors when necessary at large funds...at a small fund every PM will likely have to spend some time in front of the investors.
Read More About Trading on WSO
- Moving From Buy-Side To Sell-Side
- From No-Name College To Buy-Side Out Of Undergrad
- Buy Side VS Sell Side Trading
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