Easy Transition? (Trader to Investment Management)

[RGreener26]

I�m graduating this term and have a chance to get an entry-level position at an option trading firm. It�s not as a trader; it�s called a �trade support associate� position where I would �participate in an operations training program intended to provide you with the skills necessary to become an integral part of this dynamic team.� That doesn�t really bother me; I�d be willing to work my way up anyway, but I�m more interested in seeing if being a trader is for me.

I�m wondering if it would be easy to make the transition from this type of work to a role in investment management if it doesn�t turn out to be for me. I�m taking the CFA Level I in December and don�t mind having to apply for entry-level jobs again this time next year (or fall depending on how quickly I make my mind up). Would the switch be difficult at all, especially given the fact that I probably won�t be able to gain trader status if I do chance my mind early?

 

[RAwannabeCFA]

I started as an options trader, acutally in a similar role basically a trading assistant. I got promoted after 4 months to full trader. I did it for a while, made a lot of money, but ultimately found that although I enjoyed trading and was good (not great) at it I wanted to do something else. I made the transition to the buy side and worked as an analyst writing research reports/briefs for the PMs and made presentations to our investment committee after I completed my MBA. Now I write sell-side research.

So yes it can definately be done. It might be harder if you don't stay very long though. I would think you need to commit for at least a year or two to make a good transition. What I would do is give it a shot and then if you don't like it after some time you can make the transition once you have completed your CFA or after you go back to school for your masters.

That might not seem ideal but if you didn't go to a top 10-20 business school for undergrad chances of landing even an entry level position on the buy-side or sell-side without having completed at least the first 2 levels of the CFA are very remote.

I will say this I get offers from hedge funds now all the time because when I tell the PMs, DoR, CIOs that I started as a trader they are really interested. So if that is something you are interested in at some point this might be a good way.

 

[virginCFAhooker]

what does a trader actually do? Daytrade for the company? make markets? buy/sell stocks for the fund?

 

[storko]

RAwannabe,
As a trading assistant, were your duties somewhat like this:

Posting and settlement of all trades (Canadian and US Equities, Fixed Income securities, and Futures contracts) for all client accounts
Confirmation of trades with Broker and Trust company trading departments
Assist the head trader with daily functions
Data entry
Ensuring pricing of securities are accurately downloaded
Reconciliation of quarter end accounts
Maintaining proxy voting to ensure that all votes are completed accurately and on a timely basis
Maintaining organized records and filing

Or is this very minimal ? Sorry to threadjack, but I'm looking to switch industries as well.

 

[RAwannabeCFA]

Yeah, that is pretty much what I did for the first few months...It was like a combination of learning what we traded, how to follow it, who are the best people to trade with for each security, and then some of what I would call middle office work which is essentially what you listed above.

virginCFAhooker,

Traders do different things depending on where you work. A buyside trader for a mutual fund is going to have a different job than a prop trader or a sell-side trader who is managing positions for his firm.

When I started in the industry I was an options trader for MS but was given the lowly job of filling options trades for their retail client base. I look back now and say lowly job but actually I learned a ton about trading, the markets, and options in general. I later moved to the buy side where I actually traded independently for two of our funds and then filled PM's orders for several of our other funds. This was fun and this is where I made a lot of money but the stress and time spent at work started to kill me. So I gradually transitioned to an analyst position.