I have heard all these rumours about multi-million dollar bonuses for traders, can anyone shed some light on the highest paid institutional traders, how much do they earn are we talking 10million end of year bonus or 50million any advice appreciated. And is the greatest pay in equities, bonds or currencies and i presume it is in derivatives of the relevant sector? Nick
Nick I have no idea -however- I will make mention that Henry Bloget--of amazon to $400or $500 dollar fame was making over 10 mil a year. How sick is that? I'm sure they paid a pretty penny to dump him too. Now he's writing a book-I can't wait.
HB received a buyout package valued at $2M. As a trader at a top tier IBank I can personally tell you that a majority of the salaries you hear are a fallacy, relatively speaking. The MD on my desk will not get anything near $50M. Nevertheless, his package is valued approximately $17M. Significant hours, highly bureaucratic.
caprisk: why don't you go to or open a hedge fund? there is a lot of hot money out there and you would have more independence. i wouldn't work for an I-bank. they pay 120K to starting quants... no thanks. and also they give you humiliating work like writing VB macros or cleaning data in excel. they should hire a high school student to do that not a PhD. and besides i wouldn't have any time to enjoy the measly 120K i'd get. only an idiot would give away his money-making software, ideas, techniques, patterns, data, etc. etc. for that kind of money. the smart people go to hedge funds or trade their own capital. and finally, what's the point of making 10M if public humiliation goes along with it, e.g. HB.
17 million is a lot of money, are traders the highest paid people in wall street, by the way I am over in London, I am only 17 but verge on obsessed with trading especially currencies. I have managed to get myself a work placement at Industrial Bank of Japan next Summer for 3 months. After that I start university and should work my holidays in IBJ as well. They put me in Debt Capital Markets but there may be a possibility if I perform well of moving over to the Trading floor. Does anyone know their reputation at Industrial Bank of Japan in trading especially currencies and is there a lot of money to be made in currency derivatives? Thank you all for your help, I really do appreciate it! Nick
Financial World magazine used to publish rankings of the highest paid people in wall st and hedge fund managers were at the top of the list, almost invariably. unfortunately FW closed shop and i don't know anybody who publishes a similar ranking these days. i wouldn't feel happy entering the gamble: 17mil if i made it to MD, 20K a year flipping burgers if i blow up. I wouldn't waste my time in a bureaucratic position, i would try to learn as much as possible about trading asap, yeah i know 17yo is young but some guys spent 10-20 years until they "got it".
Buzz: Hedge Fund... In the process of formulating a capital management firm. Refer to the old adage, "Knowledge is power." Would you rather have your capital managed by an inexperienced investor or by a professional with an MBA and 8 years of experience at a BB Ibank. I have no intentions of"flying and dying" like Tiger Cap or LTCM. In reference to your statement about a trader's salary, I can assure you that all members on my desk earn multiples of 120K. However, you maintain a valid point. During the initial phases of your career at an Ibank you will work long hours and experience little benefit in terms of compensation (relative - calculated hourly), hence my reason for describing the industry as "bureaucratic."
Sorry i wouldn't give my money to anybody with an MBA and 8 years "experience" at an I-bank. In trading it's not experience what counts what counts is if you "get it", some guys "get it" pretty fast others take decades or never. Tiger and LTCM blew up because they weren't really good traders. In the case of LTCM, that spreading and doubling up stuff is a textbook case of stupid trading strategy, the chicken-elephant strategy according to nassim taleb, eat like a chicken go to the bathroom like an elephant. And they keep doing it, i went to a presentation by one of the oak hill platinum partners the other day, they are now saying they are playing "temporary imbalances of supply and demand" (yeah right, same old wine in a new bottle). They are good salesmen tough, they made people think that noble prizes, degrees and resumes have any relevance to trading, not necessarily in my opinion. I have a phd from a top university, so i don't have anything against degrees or resumes. Evaluating hedge fund managers is a complex job that cannot be reduced to inspecting resumes. Funds of funds managers get very well rewarded for that.
Any idea's of the potential trading currencies at kindustrial bank of japan, and do hedge fund managers take large position's in equities and currencies like once or twice a day or do they make several trades a day?
as far as i know the big macro hedge funds and proprietary trading desks don't daytrade currencies, they trade trends and keep positions open for several days, weeks and sometimes for months. Currencies usually move slowly but when it moves fast it's devastating, Tiger lost a lot of money in the yen carry trade, the yen loss was the beginning of the end for Tiger. Another example of chicken-elephant strategy. institutional (market making) trading is a different game it's all about capturing the spread. some client sells you yen some other buys you yen you get a piece of the action for matching them both. you have a buyer not a seller? go to your buddies at the interbank market, they can give you a still good exch rate so you still end up making a few pennies anyway...