typical career path for a trader

higher_energy's picture
Rank: Monkey | 36

if i am going to be S&T at an equities desk next year, what is the typical career path?
for the sake of the argument lets assume that i am not phenomenal and have avg. abilities.

what will I be doing until I transition into a trading assistant? how long does it usually take before they let you trade?
if somebody can lay it out by year listing responsibilities and total comp for each year at the desk, it would be really helpful.

thanks a lot

Comments (30)

Dec 18, 2006

I don't know that much about equities but from friends' experience you could be trading in 9-12 months.

I like the aggressive "lay out your comp for me" comment, I give you credit for that one

jimbo

Dec 18, 2006

As a TA you do trade, just minimally. You act more as a liason between the desk and other depts (Ops, IT, etc) to solve day-to-day problems. You also maintain trading positions which requires you to trade (not so much for the purpose of making money).

Provided you work hard do a good job, you can become a full-time trader within 1 yr.

Dec 18, 2006

Thanks a lot for the prompt replies

I want to get this straight though. As a recent graduate would I go straight into a trading assistant role or would I be doing P&L compilation/MO/Ops/lunch-serving type job for a year or two before I can become a TA?

I understand that I will be a junior guy on the desk so I am comfortable with doing all of the above.

One more question: Would you rather take a MO/Ops position at a hedge fund doing trade accounting or an entry level position at a BB at one of the desks?
Do you think that both have equal career opportunities down the line, assuming it is top 3 BB and a top 3 HF? What about exit ops to Bschools?

Sincerely appreciate all comments and advice....

Dec 18, 2006

Go to the bank

Dec 18, 2006

can you be more specific

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Dec 19, 2006

it's better to be a trading assitant than starting in MO, end of story. so you should go to the bank.

Dec 31, 2006

What ever job you take, make sure you are sitting actually on the desk i.e. not in the MO/Ops area (preferably next to a senior trader you can learn from) - where you sit is really important.

You should be trading in a year

Dec 31, 2006

Depends on the product as some are more quant than others. Target school will increase your chances for sure (OCR) but a semi and non target is doable. PWM is fine to start. There are boutiqe and MM banks that have S&T and other places that can be broker/trading firms. I believe networking in S&T is extrememly important, everyone is in close contact for 10+ hours a day. You want to get a long with the people on your desk.

Dec 31, 2006

Any finance internship is a good to have on your resume early on in your college career, so that is why PWM is the most viable option which is usually paid. Your plans sounds great, but its all about execution (grades, networking, getting the internship). Networking is important for IB or S&T especially if the firm/position you are looking to get into isn't doing OCR (for internships) at your school.

Dec 31, 2006

I'm currently a sophomore at a non-target and I interned at a REIT last summer. I gained some exposure to NAV and IRR modeling, are there any firms which I would stand a chance attaining an internship in ST at? At this point i'm not worried about which product the desk I am interning at will be trading, I just want to gain experience.

Dec 31, 2006
Futures Trader Man:

I'm currently a sophomore at a non-target and I interned at a REIT last summer. I gained some exposure to NAV and IRR modeling, are there any firms which I would stand a chance attaining an internship in ST at? At this point i'm not worried about which product the desk I am interning at will be trading, I just want to gain experience.

Hows your alumni network? I'd start reaching out to alumni who are in S&T, speak to them, learn their story and build a relationship.

Dec 31, 2006
Bobb:
Futures Trader Man:

I'm currently a sophomore at a non-target and I interned at a REIT last summer. I gained some exposure to NAV and IRR modeling, are there any firms which I would stand a chance attaining an internship in ST at? At this point i'm not worried about which product the desk I am interning at will be trading, I just want to gain experience.

Hows your alumni network? I'd start reaching out to alumni who are in S&T, speak to them, learn their story and build a relationship.

Well our IB network is extremely weak but there are a ton of graduates in commodity and energy trading out of my school especially at BP and Citi so I guess I should start there. Do you have any smaller shops in mind that would hire sophomores that I should target?

Dec 31, 2006

Doesn't the Fed/Treasury Dept offer internships? That might help at least establish that you care about interest rates and macroeconomics somewhat? One of my friends interned at the Monetary Authority of Singapore (although she's a citizen of Singapore and thus had that option).

Dec 31, 2006

I'm a junior at a non target and did FX derivative risk last summer at an AM firm. I'm trying to get an internship in FICC S&T at a BB for this summer. I'll let you know how it works out for me. Just one question: does pedigree matter for S&T as much as it does for IB?

Dec 31, 2006
nontarget kid:

I'm a junior at a non target and did FX derivative risk last summer at an AM firm. I'm trying to get an internship in FICC S&T at a BB for this summer. I'll let you know how it works out for me. Just one question: does pedigree matter for S&T as much as it does for IB?

If by pedigree you mean whether your school is a target or not then it does. In fact, the relatively fewer spots in S&T compound the problem unless you studied a quantitative subject at a semi-target. Otherwise, it's a similar networking game to IBD, save that you have to focus on different skills/interests.

Dec 31, 2006
  1. attend good school. do a bachelors in physics. do some econ classes.
  2. get an internship.
  3. start working with 22. do not do a masters. do not do a dr. do not do an mba.
Dec 31, 2006

actually..my questions are directed to everyone.

Thank you for the advice in advance!

Dec 31, 2006

What exactly falls within our definition of "energy trader" to begin with ? Mainly curde products or other things like coal and electricity ? Are we talking both physical and BB's ? I just took up a working student job at a ultility company as a first year engineering student at their natural gas desk and only getting into strategies and the company itself. Big utilities (Eon for example) hire university graduates if they have prior experience in the field, even better you have done an intern with Eon Energy Trading already and were spotted as being very talented. One strategy my company (Big German Utility) is employing in particular is arbitrage between zeebrugge and the NBP ( one of the few natgas pipeline connections that is not totally booked all the time ), use own storage facilities or spark spread trades, but spotting arbitrage opportunities is tough with natural gas, even more with electricity where mainly your short term trading is wheather forcast based, so you work directly with an analyst in the middle office handing you all the needed data for your trading day. Mostly it's brokering for clients, local utilities, while prop trade is relatively small. Most of it is done OTC anyways as the european energy system, especially for natural gas, is very shizophrenic and not as liquid or transparent as the Henry Hub US system. With brokering your focus is definitely on the long term supply side, whereas prop trading is done in the more short term markets where volatility is flying high, at least from my insignificant experience.

The classic route of an energy trader probably starts at a utility or energy company trading physical and moving up to a BB Commodity desk. Scoring a job with such a particular desk as a graduate is a lot more tough, as are BB trading jobs in general, as we all know and even if you do so you will need proven commodity experience, which you get primarily in the physical field of the business. So get your foot in the door. The next level after that would be a hedge fund or the likes of Vitol, Glencore and Gunvor that mainly hire very experienced traders who are experts in their field.

Dec 31, 2006

If you want a more detailed look into power strategies you might want to dig up the old SEC files on Enron's traders and their lovely strategy code words.

Dec 31, 2006

[quote]The classic route of an energy trader probably starts at a utility or energy company trading physical and moving up to a BB Commodity desk.[quote/]

Does this work the other way around? Do investment banks take undergrads for commodity trading positions fresh out of school, because the only trading internships I see at BB's for the most part are in FI and equities?

Dec 31, 2006

Umm - mergers and inquisitions have a guide on this, actually.

I'm guessing the route you described is the way forward, sometimes without the business school. Application development for some trading platforms require as intimate a knowledge of the workings of some markets as you would need to actually trade!

Dec 31, 2006

If you go to a top tier CS program, meaning Stanford, MIT, CMU, and possibly others, you can get trading offers straight out of undergrad without any MBA, etc. This may actually be easier than going to an equivalent business school. You just need to read enough of the financial press that you can convince someone that you actually want to work for them instead of GOOG, AAPL, or MS and that you can adapt to their culture.

Dec 31, 2006

You actually don't need to go the B-School route at all these days....

Dec 31, 2006
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