Alternative routes into Trading
Want to be a trader, but haven’t landed a place on an investment bank’s training scheme? There are plenty of other routes into the industry.
A quick glance at exchanges such as Euronext Liffe shows the proliferation of proprietary trading houses.
Navigating your way through all this can therefore be a challenge, particularly as many will be small affairs and may not offer much in the way of opportunities for graduates. There is a good online directory of prop trading houses at Traders Log.
Trading houses that have recently advertised for trainees include Mako Financial Markets (www.makoglobal.com) and TCA (www.tcafutures.com). Others, such as Schneider Trading Associates (www.schneidertrading.com) and Futex (www.futex.co.uk) do take on graduates or run training programmes, but competition is fierce.
Prop trading firm ARGO Traders (www.argo-traders.com) also takes on graduates, and partner Mark Morrison says that while currently full and not hiring, it will be running a new programme next summer.
Another that offers training is MeT Traders (www.mettraders.com). But, be warned, anyone who goes into trading thinking of it as a second-best option to working in an investment bank will fall at the first fence, cautions Basil Kaye, head of graduate trading.
“We get between 1,000 to 1,500 CVs a month and take maybe one to two people every four to five weeks. Anyone indicating even the slightest that it is a fall-back position for them will just not get through the door,” he stresses.
While a good degree from a good university will always go down well, it’s attitude, aptitude and an appetite for hard work that count the most, according to Met Group managing director Danny Kessler. “It is not purely on the academics,” he says. “We have a real mix of characters. We look for very self-motivated individuals.”
Success will also, inevitably, feed into financial reward. While at the beginning you could be on as little as £1k a month, over time the rewards can be substantial. “We have some 23 year-olds who are making half a million a year.”
Commodities trading houses
Commodities trading houses are similar to proprietary trading houses but, as the name suggests, trade in commodities. Some, such as RWE Trading (www.rwe.com), do take on graduates.
In RWE’s case, it runs a “trading placement year” for between eight and 12 students, working in back office, risk, short-term position management, business change management and global analysis.
It also runs a “trading talent pool”, an 18-month placement programme that takes on between six and 12 people a year.
Commodity trading houses will often be on the lookout for people to slot into quant, analytical or operations roles, points out David Vinton, recruiter at Huxley Associates.
Most applicants are taken on between September and October, but it’s worth keeping an eye out at other times too.
“Most will pay a similar salary to an investment bank, so probably something like £30k to £35k, rising to £40k to £50k for a quant with a PhD,” he says.
Oil majors and energy companies
These will from time to time hire people into trading positions. EDF Trading (www.edftrading.com), part of the utility Electricité de France, for instance, is currently advertising for traders for its central and eastern European team, though based in London.
BP (www.bp.com) also takes on graduates as traders through its two to three-year Trader Development Programme.
This takes on around seven to 10 people a year. Again, competition is fierce, with the company normally receiving some 900 applications for the programme, which runs from September.
Salaries tend to range from £31k to £35k, depending upon the level of your qualification.
Successful candidates learn about a range of areas, including risk, trade control, trade analytics and trading. They spend at least a year in a trade control analyst role and one year in an operations role.
But it’s very much product trading – oil, gas, power and chemicals – rather than financial trading, cautions spokesman David Nicholas.
“We are less interested in financial skills and more in personal skills, particularly as it can be quite high pressure and high risk,” he says.
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