Taking these in order:
1. What do you think does it take to be successful trader in derivatives?
If you are asking what it takes to become the next legendary trader that pulls in millions then the dissappointing answer is that it probably takes a lot of work (which is fine because you can control), but to a huge extent and more depressingly it also takes a lot of right place/right time. Theres nothing wrong with shooting for the stars, but dont stake your sanity on getting there.
Now, I think the more appropriate answer is to talk about what a person can do to make an excellent living as a trader on the sell side, and I think it comes down to a couple of high level concepts to keep in mind:
- Always watch your back: never trust too much in this business, always remember that not everyone is your friend, even if they act like it, always think about what incentives people have. I remember as a sellside trader id have 20 brokers trying to be my friend, once I moved to the buyside and changed products I talk to 2 guys. When you stop being an asset for people you quickly find out who your friends are, and therefore never divulge more than you have to to anyone because there will maybe come a time when they will want to get you out of the way.
- Network = net worth: this is cliche, but im adding it because many people think that as a trader it doesnt really matter because its all about that PNL. Well think again, because some of the best PNL opportunities come from relationships. Even little things like having very close relationships with the brokers (yes the same ones that arent your real friends) can make a career for a trader. Notice how you both pretend to be each others friends, that is sort of the underlying theme of the financial world
- Never do something you cant explain afterwards: this is a bit abstract, but in essence as long as all your decisions are defendable then you will do alright
And the single most important lesson I have ever come across, courtesy of Larry Hite:
- You cannot play the game without chips: translated to do not risk your career on a single trade
2. Is there a way to know if you would make a good trader?
Depends how you define good. Its a bit hard to say in trading because if its just PNL, well you probably have tons of people who are bad "traders" but get lucky (but then does that mean they are good traders?). But the one thing you can judge is whether you will enjoy trading, and if you enjoy it then chances are you will do all you can to be the best you can be. Sometimes chips will fall into place, sometimes they wont, but in the end you dont have control of everything as a trader, and you need to accept that. But as long as you enjoy it then you will do it with a passion and that usually leads to success. If it leads to millions in the bank is anyones guess.
3. How did you get a job on the buy-side?
Funnily enough it was a day when a chunk of my team got let go on the desk I was on, and so I began looking and found a couple online postings on the companies website. Sent off a CV and then couple months later handed in my notice. I got really lucky in the end, but then again, better to be lucky than good (or again is lucky actually good in this business? who knows)
But the take away is that you wont catch any fish if you dont throw out a net. Most of my career breaks came from what seems like chance occurences, but thats how life works, and if your net is out there then you will come across these. You only need 1 life changing occurence...
4. What is the most common myth that students have who want to pursue a career in this field?
- That its easy to get paid a lot of money (its not)
- That its a very exciting and sexy job. Just like any job it becomes repetitive and you do have to find the subject matter interesting. People forget that to master something requires repetition
5. What web sites do you recommend for someone interested in markets?
- Biz related: ft.com, businessinsider.com, zerohedge.com
- Non Biz related: espn.com
If you are working with marekts, news website are good to get overnight news and analysis, but in terms of newsfeeds you get more from brokers, internal chats, company research etc
6. What were the top three credentials that you looked for in a candidate interviewing at your BB firm?
Tbh the main thing I looked for was that they demonstrated they are really interested in the subject matter. I always looked for a candidate to have an idea of what are of trading they are actually interested in (even for summer internships) and then be able to prove to me that they have done research into that area. If a kid says they want to be in equity derivatives trading but then cant have a conversation about greeks then its not a good sign. And then the next step is to see if this person can use the knowledge learned and apply it to a slightly different situation. Id always test the candidates knowledge as far as it would go, and then would ask a question that he hasnt come across but can be answered using the knowledge he already demonstrated.
7. What made you change to the buy-side after several years?
More interesting work (in terms of diversity), more upside, better working environment
8. Was it more difficult to make the switch given you were in a BB for >2 years?
Not really, I was in that sweetspot where I had experience running a book but was still considered cheap labor. You are right you dont want to wait too long, but you need some good experience to be able to be considered.
9. Any general tips for us trying to break in (both to banking and to the buy-side)?
Sort of impossible to answer in just a few sentences, but I would say that the main thing is to explore as many opportunities as possible. For my first internship after freshmen year I sent out a CV and cover letter to 65 firms in my home city to see if they would take an unpaid intern for the summer. I got one response for interview at a PE shop. Arguably that stint led to my BB internship the following summer. When you only need one, it does come down to a numbers game.
10. Could you describe your craziest night out with clients?
As a sell side trader I thankfully never had to go out with clients, cant think of anything worse than taking someone out and needing to show them a good time even if I dont fully like them. IMO sales people have the worst job in the industry, but to each their own.
11. How should I improve my CV and cover letters to cover the fact I have no relevant work experience?
If you cant get work experience, try to get as much self experience as you can. By that I mean try really starting a business, just do something where you show you can succeed in a tangible way.
Apologies the answers got shorter as I went along, so if anyone has clarifying questions feel free.
