Trading usually refers to the trading of financial securities on a daily basis, often executing several trades an hour.
Trading can be in anything, but largely fall into the following categories:Traders trade securities on behalf of clients. A trader will never speak to a client, rather this is done by a sales person, who acts as an intermediary.
Unlike corporate finance or investment banking, hours are generally predictable as the markets open and close at set times. Frequently however hours may be anti-social if working the markets in other time zones. Also bank holidays are often worked as it is usually not bank holiday elsewhere in the world.
As a general rule, the average trader will earn less than the average investment banker, however the best trader will earn substantially more than the best investment banker.
Trading bonuses are generally based on commission, and consequently are based on individual performance and market performance. As your experience grows, your trading limits (the amounts within which you are permitted to trade by the bank) will be increased, and consequently so will your bonus.
Generally speaking, more numerate and analytical skills are required. Also, an ability to stay calm and prudent in tough situations that are your fault is a must. There is no set formula for what makes a good trader; trading is a skill in itself, however it is generally easier for science, engineering and mathematics graduates to find a way in.
Trading is a primarily male dominated role however banks are seeking to change this, having realised that can often women make better traders than men.
Exchanges such as Euronext Liffe will show you the proliferation of proprietary trading houses. Navigating your way through all of these can be a challenge though, particularly as many of these will be small operations and may not offer a great deal of opportunities for graduates. There is a good online directory of proprietary trading houses at Traders Log many of which are worth approaching.
Trading houses that regularly advertise for trainees include Mako Financial Markets and TCA. Others, such as Schneider Trading Associates and Futex do take on graduates and run training programmes, but competition is fierce.
Proprietary trading firm ARGO Traders also takes on graduates at less frequent intervals, as does MeT Traders.Commodities trading houses are similar to proprietary trading houses but, as the name suggests, trade in commodities. Some, such as RWE Trading, take on graduates.
RWE 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.
The firm also runs a “trading talent pool”, which is 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.Oil and energy companies will occasionally hire people to work in trading positions. EDF Trading, advertises for traders for its central and eastern European team, though based in London.
BP also takes on graduates as traders through its two to three year "Trader Development Programme".
This programme takes on between 7 - 10 people a year. Competition is fierce; the company receive about 100 applications for each position.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.
This type of role is very much commodity trading (oil, gas, power and chemicals) rather than financial trading.
Companies will be particularly interested in your technical skills and financial knowledge. Unlike most jobs in the city, technical skill plays an equal or even greater role than personal skills, so a mathematical or technical background would be advantageous.Anyone who considers trading as a fall-back option to working in an investment bank will undoubtedly be rejected by recruitment teams. Trading is a very competitive career and you should only apply for relevant jobs if it is something you are passionate about.
Top trading firms can receive 1,000 to 1,500 CV's a month and hire a maximum of one to two people every month. Your CV must be impressive.