------------------------------------------------------------ if you want a career in the "city" doing anything remotely front office based then pretty much the worst thing you can do is work for an arcade. i have done for 4 years now and am practically unemployable in my present state...i.e a good economics degree from a red brick uni. and exposure to markets trading fixed income futures. what do i do all day....buy and sell futures. brilliant. unfortunately no institution is going to give you the time of day (however successful you are)...even though i think there are skills developed in this job that would be valuable to large financial institutions luckily i make a pretty decent living doing this...but if i had my time again...not sure. i have friends who took jobs at back office level and at the info. providers (i.e. bloomberg/reuters) straight out of uni and along the way snuck into front office jobs at banks and are now earning really decent money. and they were/are absolute monkeys. what i'm trying to say is that once you have an arcade on your cv, banks will only look at that...and not the superior degree you may have compared to average joe who's worked inputting data at bloomberg for two years. i'm taking the cfa level 1 exam in june purely for this reason...if, one day i've had enough of this job, or, if i can't make the living i have become accustomed to, i need some kind of back up and i need these guys to look past the fact that, in their eyes, all i've done for 4 yrs is provide liquidity in government debt futures markets!!!!!
thanks for the response. although im still unsure as to why they frown on arcade work so much? surely if they had to take someone with no experience whatsoever, (e.g. a history grad or even relevant such as economics) the independant trader has at least shown an interest and has some relevant experience, knowledge of how things work? they would have to train a history grad for a year or so to get to the same level as you? and the history grad guy may not be any good. ???
my views exactly...but unfortunately that's not how it works! the local trader world has changed over the last few years with more and more grads working within it. previously the floor was dominated by the essex wide boy cartel and i don't think we've managed to shake off that tag. institutions put as much credence into what we do as sitting at a roulette table. they think we're gamblers. red or black...up or down! they ignore the fact that to be successful at this requires concentration, discipline, risk management, money management, consistency every day, knowledge of global financial markets and how events influence the markets we trade, technical analysis skills and last but not least making split second decisions under immense pressure...decisions that can affect whether or not you can afford the rent/mortgage this month - not whether you get an extra 50k on top of your 150k basic!! what is even more annoying is the fact that having been more successful than 90% of the all the grads i've met doing this job doesn't even make you stand out as someone who, in their first job in the markets has proven themselves above average within their peer group. this isn't meant to sound bitter...i love trading and i haven't applied to loads of other jobs in the markets - but i've seen so many good grads lulled into these 'graduate training programs' only to fail, and end up being tainted, and unable to get a job. my best advice is if you really wanted to trade...do it. bear in mind you're giving up health insurance, pension benefits etc., but what you're getting is a certain lifestyle. I would definitely recommend doing something at the same time though...i.e. mba/cfa just in case.
I totally with squadron leader, having been down the "providing liquidity in government bond futures" road. getting jobs with reputable institutions trading is extremely difficult when an arcade is on your CV. The only other road to it is execution only trading at hedge funds, where the printer next to you spits out BUY 45 lots natural gas, and you do it, with no input as to direction, conviction etc, which when you have traded your own account, is going to bore the socks off you. Do this for a couple of years and then you may get lucky, but also bear in mind that many many institutions are running increasingly quantitative trading programs, and traders are Ph.D.'s and physics programming guys, just check out the amount of trading jobs paying £100k for Phds. Another point to factor in is that trying to trade a program on th beside of a real job, so that you are still trading is not often possible due to compliance laws, which you really don't want to be caught breaking, as all future hope of a decent city job is out the window then. It is totally ridiculous that that is the case, the technical analysis, fundamental knowledge and product knowledge built on arcade floors is immense, but from banks points of view trading these is not all they do, they do lots of arbitrage, options trading, equity trading, stripping out bonds equity and optionality from convertible bonds and selling the volatility style trades, which arcades just don't teach you, or want you going anywhere near.
this all kind of sounds back to front to me. traders trade for the freedom - not so they can do a 9-5 (more like 7-8 in a bank). work when you want from where you want. look at the best guys in arcades. do they go join banks? no way. they probably earn more on their own. when they get really big, they start their own funds. then, if still successful, the banks come crawling to THEM to park money. look what happened in the last bear market - all the banks shed their traders and they ended up in arcades. do they want to go back? depends if they are successful! if you want to know why banks wont employ arcade traders, find out a bit more about how banks trade and their business objectives. then you will start to understand that a great door to door insurance sales man couldnt get a job selling airliners for boeing. yes its a sales job, but different skills are required. if you are a trader with a dream of working in the rat race for some bank - to impress your mates with a business card, then youre in the wrong business anyway. thats what i was told on my first week working at a prop firm. i agree. id also add that if that is tyour dream, then you will never be truly successful doing what you do because your heart is in some bank job, not 100% on where you are now.
Do you guys know if any Prop firms give out interships to 17 with 2 years of ecpirence in NYC or the tri-state area???//
think i'm somewhere between the 2 views on this one. fredbloggs is right that prop trading in an arcade is totally different to anything the banks do trading. that's why an arcade trader is never going to be offered a top / senior job at a bank - they have no experience doing the job. however, some of the skills are transferable and so it shouldn't preclude you from working in a bank (starting junior) just because you have worked for an arcade. however, bare in mind that it is much much harder to get a job at an ib than an arcade. ib trading positions have literally 1,000s of applicants from top uni's. good luck getting any grad position in front office unless you have atleast a 2:1 from a top 10 uni. by contrast, arcades are much more relaxed about who they let in which may partially explain the higher success rate at ib's. obviously the job in an arcade is totally different. you run your own business, develop your own plans and strategies, etc. many just aren't prepared for this and start trading with no idea at all which, imo, hugely increases the chance of failure. a bank will provide all this for you. however, prop trading is much more vocational than ib trading and you get freedom etc and all the benefits that we all know about. if you want to run a biz / work for yourself and trade then it is by far the best option. but as fredbloggs says, if you really want an ib job, don't go down the arcade route - it won't get you where you want to go. better to bite the bullet now, take a junior role at an ib and work your way up thru the ranks.
I think we have to remember there are a lot of numpties working in banks too, a lot of them just gliding by on 50-100k a year. Probably only 1% of these guys in the banks make really good money. Okay not everyone makes it in prop places, but I think if you do, the financial rewards are probably going to be higher than taking the risk of joining a bank and being in the top 1%.
oh yes i do agree getting into i bank is the most impossible thing to do. i think mainly it may be the fact taht i lack in interview skills but 100k a year still seems quite far away. but does prop shop really can give you freedom in terms of time and flexibility? of which u need to go in as most of the ppl say 7-8 and getting the chop in the head if u don't perform well. anyway gd luck to everyone.