Career Options (Interesting Background)

cardy1 · Apr 10, 2013

I've been restless lately and have been contemplating a job/career change and would really appreciate any advice I can get.

My background: Educational background is in Quantitative Finance (Masters from a well known university). I work for the largest derivatives exchange in the world out of the Chicago office. I don't want to name the company because of my completely irrational fear that my boss is a member here (you know which company I'm taking about). I work in a valuation/risk role I have experience working with everything but equity derivatives. Unfortunately, my role keeps me pretty insulated from our customers (aka you guys) and I haven't had the chance to learn about all the different career opportunities that are out there.

My Problem: I see no growth in the current role I'm in. I've explored other opportunities within my company but just don't see any growth. Also, we have a lot of people who have been "grandfathered in" to managerial positions and I honestly think it would take me 10+ years or more to get there. Basically, regardless of my performance, I'll have to wait for these guys to retire.

What I really want: I want to one day trade my own account and be my own boss. I know it's a long ways away, but want to get started while I'm still young and not married. Since it's going to take a lot of money to get there, I want to earn that cash while getting experience that will eventually help me.

I've thought about working for prop shops, but I'm not entirely sure how this would work. Do they pay a salary + % of profits? Would someone be kind enough to give me a quick explanation? Also, I'm assuming these jobs are pretty hard to get? I do have some floor trader connections and from what they told me, I'd have to clerk for someone before they even consider backing me.

And before anyone suggests, I don't want to be a quant analyst writing and testing code. I want to day/position trade manually.

Thanks for reading and responding to my post!

cardy1 · Apr 11, 2013

Also considering applying to Booth and Kellogg. At least then, I can get a much higher paying job that will let me trade my own account on the side.

garachen · Apr 16, 2013

Sounds like your background was much like mine. Might have even gone to the same school.

Best bet would have been to join one of the major Chicago firms right after the FinMath program. Not sure why you are so interested in doing manual trading. It's kind of a dying industry. Most of the better places won't hire you if you can't write code. And even those places have been laying people off lately.

If you really want to do manual trading look at Transmarket Group. I haven't stopped by there in a few years but when I did it was full of people manually trading ED futures.

But really, it's hard to do much these days without coding. Even if you trade for yourself - you get to a point where expanding is tough without automation.

But, while you're there (I assume you are at CME) you can do some good and get them to stop treating their customers like criminals. Out of all the previously Chicago based exchanges ICE is the most customer focused. Even with their high fees and murky rebate programs they are still killing it.

Not saying there aren't a few nice people at CME but I've been sent more than my share of nastigrams.

nazzdack · Apr 16, 2013

Quote from cardy1:
----Booth and Kellogg.
----get a much higher paying job that will let me trade my own account on the side.

1) U of C and NU are decent schools but they're of no value for discretionary trading. :eek:

2) Be careful with "that". Many places can and will forbid personal trading for fear of conflicts of interest and improper focus.

cardy1 · Apr 16, 2013

Thanks for the advice. Will look into Transmarket Group. I actually don't mind coding, and am pretty good at it. I do code in my current role and I'm good at it. I'm just afraid of getting into a job that is advertised as a quant trader position and ends up being a software developer gig with little to no exposure to the markets.

Even though the world is moving away from manual trading, I still think the most profits are to be made from manual trading. The floor guys who are really good at what they do still trade manually and are doing just fine.

As an exchange employee, I'm not allowed to trade anything outside stocks and stock options, which sucks. I'm going to start building some trading systems in MT4 (one of those free FX practice accounts) and see how I like doing that.

Would hedge fund jobs be something worth pursuing? Or, are they laying people off too?

Which departments have you interacted with? I'm surprised that you've had such bad experiences. It really depends on who are, I guess. If you're calling about issues with your orders/fills, you should be getting wonderful customer service...

Quote from garachen:

Sounds like your background was much like mine. Might have even gone to the same school.

Best bet would have been to join one of the major Chicago firms right after the FinMath program. Not sure why you are so interested in doing manual trading. It's kind of a dying industry. Most of the better places won't hire you if you can't write code. And even those places have been laying people off lately.

If you really want to do manual trading look at Transmarket Group. I haven't stopped by there in a few years but when I did it was full of people manually trading ED futures.

But really, it's hard to do much these days without coding. Even if you trade for yourself - you get to a point where expanding is tough without automation.

But, while you're there (I assume you are at CME) you can do some good and get them to stop treating their customers like criminals. Out of all the previously Chicago based exchanges ICE is the most customer focused. Even with their high fees and murky rebate programs they are still killing it.

Not saying there aren't a few nice people at CME but I've been sent more than my share of nastigrams.

cardy1 · Apr 16, 2013

Quote from nazzdack:

1) U of C and NU are decent schools but they're of no value for discretionary trading. :eek:
2) Be careful with "that". Many places can and will forbid personal trading for fear of conflicts of interest and improper focus.

1. Understood. I just think an MBA would open up so many more doors. If I suck at trading, I could always become an overpaid regulator.

2. Right now, my cost of living is really low and I plan on keeping it that way for a long time. If I get a high paying job, I can wait a few years and save up 500K+ and then quit and trade for myself. Still beats low pay and restrictions of trading in personal accounts.

garachen · Apr 17, 2013

I'd say getting an MBA after MFE is kind of risky. Makes you look less focused and kind of dilutes the value of either. Most places I know would hire either one or the other but not both on the same resume. Just something to think about. Also, what employers are looking for is fairly localized.

In Boston, I found most hedge funds want MBA's, in CA the tend to take CFA's. Chicago didn't have much of a hedge fund scene - but for what I'd call the equivalent, trading companies, the very profitable small ones you've never heard of were very PhD centric. Larger places (Jump, Getco, Infinium, etc) have more of a mix but are shedding jobs.

I found the work environment in CA and Chicago to be more to my taste than Boston (probably because I didn't have an MBA). Chicago seems to be more of a meritocracy. Where if you do something good you can move up the ranks fairly quickly regardless of age. Boston was much more about 'pedigree' and networking. I was explicitly denied promotions because I was 'too young'.

From the outside, hedge funds seem to be a great place to be. I really wanted to get in one and pretty much would have worked for free to do it. (Of course, never say that - they'd never take you if you do.) I think it might have been fun for the owner and 2-3 others but not for most of us.

Really sounds to me like you need to get out and talk to a bunch of people. Figure out what you are really trying to do. And in the meantime, trade stocks. Much easier than futures anyway.