Trading Firm and Brokerages

[PeteyG]

Hi Guys,

Basically looking for a place to work after graduation and looking to apply for trading or brokerage internships or grad schemes. Would anybody please be able to tell me of any small tradimg firms or brokerage firms that would be good to start off at in London preferably (but don't mind if I have to go further a field)?

Just in case you are wondering about my background, 2:1 expected in maths and economics degree, did summer course in advanced mathematics in LSE this year, 8 months work experience in institutional asset management as a sales analyst, 2 summers working in high street bank and achieved top sales before this.

Thanks in advance for any help,

Peter

 

[cr6196]

nice work pete, sounds like you will be more than up to an internship/grad scheme....where exactly do u want to work tho? whats a brokerage firm? whats a small trading firm? i don't know if i can give you a good answer but i think if you were more clear it would definetely help other people. Do you mean prop trading? Marketmaker? Stockbroker?

 

[PeteyG]

nice work pete, sounds like you will be more than up to an internship/grad scheme....where exactly do u want to work tho? whats a brokerage firm? whats a small trading firm? i don't know if i can give you a good answer but i think if you were more clear it would definetely help other people. Do you mean prop trading? Marketmaker? Stockbroker?

Thanks for the reply cr6196,

Apologies, for the broadness of the question. What I would like to do would be to work as a prop trader. Whilst working in asset management I became friendly with a trader and was very lucky, as he spent 2 afternoons showings me how he trades options and bonds. Also, on a number of occasions I met with PM's and they gave me the utensils to learn about valuations. One also explained how he diversifies he diversifies his funds and the different delta's, beta's, alpha etc.

To keep myself on the learning curve I have started reading and learn by doing through a forex account with Oanda. I am also in the process of purchasing a book on Technichal Anaylsis by John J. Murphy, studied junk bonds and read the predators balls to help get a broader view. May sound ridiculous, but got to keep reading to learn.

By small firm I mean a boutique firm or not one of the top tier firms. Yes, I will apply to the top tier firms and would be delighted by a call up but I am also realistic and I appreciate any work that would help in the progression in a career as a trader.

To be honest and I don't mean to sound like I am clutching at straws but I would enjoy working as a market maker also. I got to see a brief snip of how they interact with the traders, to materialise what the competition spread may be etc. and would be an area that also sparks my interest.

Does this help any bit (possibly a bit long winded)?

Thanks,

Pete

 

[cr6196]

Again what sort of trader do you want to be? One who executes orders for an asset management co/ hedge fund/customer orders for an ib (essentially a marketmaker)? do you want to trade your own ideas and someones elses money, as in Futex? Do you want to do that for an ib/hedge fund? The thing is these jobs all require different skills.

I have in the past done a bit of research into this, what i found was that prop trading for an ib is an unlikely prospect for a graduate. My understanding is that prop traders have years of experience, doing exectution for customers/other depts etc etc. Also anyone who is a trader at an asset management is probablly a dealer/execution only trader, as in they execute orders, rather than coming up with ideas and executing them as in a prop firm.

I would also add that I am in the same position as you, seeking a job in the industry. As far as i understand, the job of "trader" means something different everywhere...for example, in one Hedge Fund, it might mean execution only, in another it means you actively trade the capital...

 

[PeteyG]

Again what sort of trader do you want to be? One who executes orders for an asset management co/ hedge fund/customer orders for an ib (essentially a marketmaker)? do you want to trade your own ideas and someones elses money, as in Futex? Do you want to do that for an ib/hedge fund? The thing is these jobs all require different skills.

I have in the past done a bit of research into this, what i found was that prop trading for an ib is an unlikely prospect for a graduate. My understanding is that prop traders have years of experience, doing exectution for customers/other depts etc etc. Also anyone who is a trader at an asset management is probablly a dealer/execution only trader, as in they execute orders, rather than coming up with ideas and executing them as in a prop firm.

I would also add that I am in the same position as you, seeking a job in the industry. As far as i understand, the job of "trader" means something different everywhere...for example, in one Hedge Fund, it might mean execution only, in another it means you actively trade the capital...

To start I would like to be a marketmaker for an ib or asset management firm (basically whoever will take me) and develop into a prop trader eventually as my skills develop. As I said before, if I was lucky enough to attain a role starting as a prop trader, I would be by no means reject that. It all starts with the struggle of getting in the door first of all.

In the long run I would like to invest my money and to be intrusted with capital from an ib or clients to trade. It will be extremely difficult to get to that point but I'm putting in all the free time I have outside of university at present, studying,researching etc. At the end of the day its about looking at a way in the door to progress a career in what I want to do. Hence why I was looking for the names trading/asset management/hedge fund but foremost an ib that are not as well known that may lead to that opening.

Does this nswer your questions? What skills would you see as most vital to start off?

Thanks,

Pete

 

[cr6196]

Yeah cool, i understand what ur saying now. I have similar ambitions actually.
The skills i think are most valuable are passion and an open mind. I think it is really hard to tell what employers are looking for.
Some things i have been thinking about tho are that in an asset management comapny, what is the scope for career development? it seems like you can only be dealer/head dealer? If you were employed as execution-only for a HF, would you be able to make your own trades?
I'm not totally sure if that bothers me, but it might bother you.
What is certain is that there is virtually no chance of getting a role as a prop trader anywhere else apart from in a prop trading firm...you need a massive amount of experience before any bank/HF would let you trade. I also tentatively add that many HF/asset management traders would not be able to trade their own money because the resources these companies have put them at a massive advantage...i have been looking at hedge fund/asset management personally and their dealing positions (as opposed to banks), but i have been bound by certain geographical constraints.

There is no better way than learning how to trade than actually trading. I advise reading esp at the start. but there is a point when you have to learn from the market. I went in a bit too quickly, picked up some bad habits. I would add though that i question the value that employers place on actual experience relative to academic results at university.

 

[gooseman]

got to say there are some good points in here but there are also plenty of mistakes/misconceptions.

 

[cr6196]

thanks very much, i felt a bit out of my depth seeing as i am essentially in the same position, could you point them out?

 

[gooseman]

will do when i get a spare half hour or so.

 

[PeteyG]

Yeah cool, i understand what ur saying now. I have similar ambitions actually.
The skills i think are most valuable are passion and an open mind. I think it is really hard to tell what employers are looking for.
Some things i have been thinking about tho are that in an asset management comapny, what is the scope for career development? it seems like you can only be dealer/head dealer? If you were employed as execution-only for a HF, would you be able to make your own trades?
I'm not totally sure if that bothers me, but it might bother you.
What is certain is that there is virtually no chance of getting a role as a prop trader anywhere else apart from in a prop trading firm...you need a massive amount of experience before any bank/HF would let you trade. I also tentatively add that many HF/asset management traders would not be able to trade their own money because the resources these companies have put them at a massive advantage...i have been looking at hedge fund/asset management personally and their dealing positions (as opposed to banks), but i have been bound by certain geographical constraints.

There is no better way than learning how to trade than actually trading. I advise reading esp at the start. but there is a point when you have to learn from the market. I went in a bit too quickly, picked up some bad habits. I would add though that i question the value that employers place on actual experience relative to academic results at university.

I think ur right with regards to passion and an open mind. What I also did to show an entrepeneurial skill was to start a tuition school for secondary students, which has double in size over 2 years, reason being from a small enough town and word travels fast. Also, just turnedd 22 so can relate to the kids.

From what I saw in working in asset management was that many of the traders seem to be interested in a cross over to being a PM or to become the boss. Where they go from there I do not know but they are extremely busy and tend to do 7-7 shifts most days. As for making your own trades in HF, I will take a look and see what I can find and let you know. If you don't mind me asking, how do you mean that you went in too quickly and what are the bad habits you picked up? With regard to your last sentence, were you implying that firms tend to look more toward experience than education? As I found that they prefere someone with something relevant to back them over highering someone just with an education.

Also, thanks for the input Gooseman and look forward to hearing what you have to say.

 

[cr6196]

i meant essentially education is important, i would much rather have a high first, than experience (beyond what could be called an "interest") because presumably they are going to teach you what you need to know (beyond the basics)...this is just the way i look at it.
my personal problem, has been thinking i know more than i do and other stereotypical newbie mistakes...it happens...