Pay little attention to people who say âxâ degree is âa waste of time / money, donât botherâ. If you want to get into a firm where you can quickly (year or two) begin trading seven or eight figures a day your education and GPA are critical if for nothing less than to keep your resume out of the waste basket.
My comment on an economics vs. finance degree is based upon my experience. Last year I interviewed with many of the firms which have been discussed on this board, all of which paid salary +full benefits.
Undergrad finance degrees are often focused on corporate finance (cash flow planning etc). Even if your program has a substantial investment area the skills you learn are somewhat initially 2nd tier in what many trading firms are looking for (#1 good with numbers & stats read econ). Knowing your way around an annual report is great, but you arenât going to be expected to perform in-depth fundamental analysis very often. Some one may say âknowing how to do solid fundamental analysis is a negative because it makes you seem like a long term thinkerâ. Not true â again being well versed is an asset, especially as you move from clerk to trader, or wherever else your career takes you. If you want to get into options or futures then defiantly take whatever classes your school offers in those subjects. Most firms will train you (usually online and in lectures), but if you have a solid basic understanding of what you will trade they may think your chances of success are somewhat higher than someone with no exposure. Read Natenberg if you really want to show interest in options. Understand the pricing models, but know you will never calc a theoretical value yourself, everything is automated today.
Economics is a valuable background to bring to the table. Thereâs a reason why economic professors are the highest paid in academia. As applied to trading â statistics! Any serious trading interview, at least in my experience, is heavy in statistics and probability. Be able to do calculations rapidly and accurately in your head, and give reasoning to your results. Most undergrad programs will give you a solid foundation of skills which you can apply to all kinds of scenarios. Having a firm grasp on supply and demand and being able to translate changes three of four products can give you an edge. Along with countless other things you will learn. Once you get into your upper division economics classes you will find that a lot of what you do is apply intermediate level skills to new advanced subjects. Take a class in monetary economics if you can, this topic often comes up in interviews. (Know the Fed Funds rate, how the Fed implements changes, relationship between the FF rate and inflation, etc).
You can decide to major in anything you want, but a history major may find they get far fewer call backs than a stats or math major. Regardless of your major be ready to do lots of quantitative problems in your head without the aid of paper/pencil. Know what the markets are doing and keep a cool head. A lot of firms will intentionally make the interview as stressful as possible for obvious reasons. Maybe the above advice doesnât apply to everyone, and Iâm sure many people have been successful without a formal education, but when entering todayâs job market I believe an education is key. If youâre serious about getting onto an exchange floor you can make it happen. Donât listen to people whoâve said âyouâd better have a frat brother on the floor / or youâll have to sweep for the next five yearsâ, itâs not true.
As open outcry pits go hybrid or electronic the high school educated 6â5â guy who only understand how to read the sheets and is buddy buddy with the specialists will soon be out of a job. The smart guy who also has trader instincts will have a job even if the floor does close, heâll just stream his quotes into the market from his desk.
Good luck.
