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StraightOuttaBO
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Joined: October 24th, 2009, 10:18 pm

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October 26th, 2009, 3:12 am

I recently graduated with an MFE from a good school and now I work in market risk at a big bank. The job is mostly reporting and position monitoring and babysitting the risk systems. Most of my time is spent dealing with mundane operational issues and telling IT guys to fix random glitches (e.g. curves somehow didn't get linked causing VaR to blow up, wrong instrument type, trade booked in wrong account, etc. etc.)I’d like to move into trading, but entry-level risk monkey to trader is a long shot, if not an impossible one. As to why I settled for a job in risk to begin with, well, the job market was/is absolute shit and at the time I considered myself lucky. Given that half my class is unemployed and the other half work in similarly shitty jobs, I suppose I shouldn’t be complaining too much, but I feel all that stochastic calculus and derivative pricing theory is wasted.Now that I’m not eligible to apply for the fresh-out-of-school S&T programs, I already have a master’s, and I have the indelible stamp of “Back/middle office monkey” on my resume, is there any way to work my way into trading? I’m young (early twenties) and wouldn’t mind being a trading desk coffee bitch.I have heard fables of market risk guys and even product controllers somehow clawing their way onto the desk. But then again, I have heard many more stories of people staying in risk for years in the hopes of a such a move, and ending up stuck there. Would you recommend someone like myself to keep plugging away for a couple years and try to get onto the desk, or should I try to find a FO job elsewhere? Is that even possible for me anymore (e.g. is one year in BO/MO just as bad as five years)? What sort of roles should I target? I’m much better at C++ and programming in general than your average back office monkey, but my maths isn’t PhD level. I'm also very interested in structuring roles (isn't everyone?)Thanks for any responses, and especially hoping to hear from Dominic on this one.(P.S. to any fresh undergrads w/ no work experience contemplating an MFE: Don't do it unless you're OK with the idea of being me in a year).
Last edited by StraightOuttaBO on October 25th, 2009, 11:00 pm, edited 1 time in total.
 
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KackToodles
Posts: 4100
Joined: August 28th, 2005, 10:46 pm

Escape from the risk management ghetto

October 26th, 2009, 3:19 am

tough luck, man, you are in a shit hole. The best thing that can happen to you is to get laid off with a 1 year severance pay package. That would give you a chance for a fresh start and one year to look for a new job. Since you already have your phd, the best you can hope for now is to jump out of the BO monkey suit into either a phd program or an MBA program, and then interview for entry level associate positions at Goldman out of school.
 
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brotherbear1220
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Escape from the risk management ghetto

October 26th, 2009, 4:18 am

Hey, man. I think your situation isn't completely uncommon. I graduated in 2008 with an MFE from a top school, and I took the one any only trading job I was offered, which was in FX (spot, forwards, currency swaps, NDFs). The fact is, though, I was lucky to get a first-year analyst job. Most of the kids in my class weren't so lucky. A few had better luck than me, and a few had worse.I ended up leaving after my analyst programme ended because flow FX isn't where I want to be. Whilst it might not be market risk, I also don't use any math skills whatsoever. Ideally, I want to be an options trader, but options simply wasn't an option this past year. Very few kids got the chance to start on a good market-making desk in any sort of options-related product because those desks were shinking as structured products became less sexy. And most of the kids I know who started on options desk didn't do anything. I mean...I got coffee for people. I got teas, breakfast, and lunch too. I would move people's cars. I would get their groceries for them. I was a 'go-for' ('go for some burgers today,' for instance). At the same time, though, I got to trade. I traded a lot. I traded prop because no one could potty-train me on one of the franchise books, so I had to make money for myself. There was a bit of luck involved. I was given responsibility because people thought I could handle it and they liked me. I was given more responsibility because I was good. Most importantly, though, they liked me. You won't be given a shot if people don't like you.In your case, you need to figure out a way to move into the front office. No one is going to come to the backoffice looking for a trader. I wouldn't (mostly because our back office guy couldn't remember my name despite talking to me EVERY DAY for a year--Winston, if you're reading this, you're a moron). You have to somehow get to work with the FO guys. They have to want to bring you onto their desk, because they have to want to train you. They have to want to hang around you.Since you're a young man who (presumably) has debt associated with his MFE, I think you have two options: 1.) Finagle some project work out of your boss that lets you interact directly with the traders whilst applying for analyst/associate programmes right now. I don't know what bank you work at, so I don't know if you are based in the same physical location as your trading floor, but you need face-time. Someone needs to see that you're not just another BO jubb. And eventually, you need to ask to get on the trading desk. You have to make it known that you want to be a trader. After working with someone on the desk, you're going to need to speak with the desk head, and you're going to have to ask to move onto the desk. Some people respect pluck. You could do it tomorrow, if you wanted (and you know someone--otherwise, why would they listen?). And it's a lot harder to tell someone 'no' in-person than over the phone or by e-mail. I mean, asking straight up if you can join the desk of someone you've never met nor had any interaction with is unlikely to be a successful tactic. But if you've had some contact with them, and you have an honest conversation with them, asking if you can, say, sit with them for a few days to learn more about the business, they're going to have a hard time turning down your request.2.) Talk to your current boss about your goals, and see what he thinks and (hopefully) if he can make some introductions for you. It might be hard to talk to him, but what do you have to lose? A shitty job in the back office that you don't like, and which isn't adding value to your CV in a meaningful way? Unless you're desperate for a paycheck, I don't see the downside. If he doesn't understand your situation and refuses to help, quit and try your hand at applying to analyst programmes right now. You're not too old to start on a sales and trading analyst programme. Most of the people on options desks don't come straight out of undergrad anyway. I don't see how you could get an associate role on a trading desk without any trading experience, so I don't think that working for another year, then applying to b-school, then applying for associate roles is going to do you much good. Also, since you already have an MFE, an MBA doesn't add much value to your CV in the eyes of a trader. The job market isn't as bad as it was a few months ago. It's certainly nowhere near where it was a year ago. Banks under-hired in the past 2 years, so they're now looking to beef up their ranks a bit. And we always need coffee-runners (I actually like getting the coffee--most of the time, you get a free cup of coffee out of the deall; also, the coffee order doesn't get F'ed hard when I do it), so there will always be a need for analysts.I think, though, that if you have a competitive CV, and you're already inside a good firm, I would talk to your boss. Jobs are about connections. Use your existing connections. Who do you know that actually trades? Anyone from your MFE? Do any of your professors know industry insiders? Your boss in the MO/BO must know some people in the FO. If he advocates for you, and is willing to allow you the chance to sit with the FO guys for a week or two (perhaps offer to use your vacation time for this as opposed to asking him to make the introductions and then pay you whilst you're trying your best to defect). Talk to headhunters, and make sure they know you are looking for a FO analyst position. Make sure of it. Don't waffle. It won't do you any good.Anyway, I hope this helps.
 
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MatthewM
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October 26th, 2009, 4:26 am

Do MFEs generally start at an analyst level?
 
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brotherbear1220
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October 26th, 2009, 6:09 am

I guess it's possible for MFEs to start as associates, but I wouldn't expect to start as an associate if you don't have any work experience.It all depends on work experience, really. You might try to apply to associate roles if you have done something applicable. Remember that MBAs who come in as associates already have (at least) 2 years of work experience, so if you're doing your MFE after already doing an analyst program somewhere, then apply for associate roles. If you're doing an MFE right after college, you might try applying to the full-time associate programmes at major banks, but I reckon that will result in a lower hit rate at those banks.
 
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KackToodles
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Escape from the risk management ghetto

October 26th, 2009, 6:12 am

gofer, so, like, how many times did you spat into the coffee of a trader you didn't like?
 
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StraightOuttaBO
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Joined: October 24th, 2009, 10:18 pm

Escape from the risk management ghetto

October 26th, 2009, 9:12 pm

brotherbear, thanks a lot for your comment. I also think an MBA would be a waste of time and money; I have the feeling that it would only help if I had some good experience going in to begin with. At any rate, I'll definitely try to pull on my connections and see what happens.If I had the opportunity to move into, say, risk analytics, would I be in a better position? It's decidedly more quant-y, but at the same time I'd be digging myself even deeper into back office (that group don't even sit on the trading floor).
 
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drews26
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October 26th, 2009, 11:37 pm

Completely agree with brotherbear1220 on almost every single point. As I mentioned in other threads I personally know several people who moved from market risk to the desk (during good times 2005 – pre-summer 2007, don’t know anybody from anywhere who moved post 2007). You basically have 2 choices either to gamble, go for top-5 MBA and try to get into Associates S&T programs afterwards (there’s a huge opportunity cost associated with it and tuition is about $130-150k, so overall it can easily set you back by $500k). The 2nd is to network internally with the head of the desk. If you send out some VAR/exposure limit reports to 20-30 people and the head of the desk contacts you directly and asks some questions that’s your “time to shine” . Alternatively if somebody hits “reply all” button, you also “shine” as much as you can since few senior trading desk people will probably be on the list as well and may notice your reply. I think only the head of the desk or somebody on the desk very senior can help you, since junior traders (VP-level) will treat you as a competitor. I doubt that hanging out in bars or stake-houses where traders hang out or talking to traders in any social situation (as opposed to work-related one) will be of any help, but you may try that as well, it can’t hurt.Finally a lot depends on the bank. In my previous bank Risk sat on the trading floor not far from the trading desk, in my current bank Market Risk sits on the different floor (at the back of the back office). Of course it’s better to be on the floor, since at least some traders will know your face and say hi in the elevator (or not ).There’s one more way I know. I know a guy who did very IT-focused quant work in major bank, he left to go to a little more client focused role in another (not top-notch bank) fixing VBA macros for the desk but also interacting with clients a little – no trading though. That was back in 2005 when things were good. Somehow he managed to get on the prop desk in that 2nd tier bank (right now most of the banks have closed their prop desks, maybe except for equities and energy, but you can always go to the major buy-side firm). Anyways, this guy been on a buy-side (prop desk) daily interacted with all the major sell-side broker-dealers and developed work relationships with them, and one day convinced a top-notch desk in the very top bank to take him. Keep in mind that major broker-dealers take their clients for dinners pretty often, the people who usually come are mostly sales, but it’s good to know them as well. Sometimes one or two traders may drop by too (to get a free lobster and talk BS).Headhunters are completely useless in trying to switch from risk to the desk, since they’ll only try to place you in jobs similar to what you did already. That’s because relationship with a client is (understandably) the most important thing for them and they may be afraid to send your resume to the front office junior opening, because the client may not find your background appropriate which will reflect negatively on them (that's the explanation they’ll give to you anyway as to why they can't send you to front office openings). The truth is that HHs just don’t have any junior desk jobs just because they get filled either trough Analyst/Associate programs (I would guess 80% of the openings) or internally (other 20%)
Last edited by drews26 on October 26th, 2009, 11:00 pm, edited 1 time in total.
 
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repoman
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October 27th, 2009, 12:49 am

QuoteOriginally posted by: StraightOuttaBOI recently graduated with an MFE from a good school and now I work in market risk at a big bank. ...Given that half my class is unemployed and the other half work in similarly shitty jobsNo offense, but this does not sound like a very good school.I understand you don't find the work interesting or challenging, but would you be willing to tell us what your 1st year compensation is/was?
 
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chaoticrambler
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Joined: September 29th, 2009, 7:56 pm

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October 27th, 2009, 2:55 am

QuoteOriginally posted by: StraightOuttaBOI’d like to move into trading, but entry-level risk monkey to trader is a long shot, if not an impossible one. As to why I settled for a job in risk to begin with, well, the job market was/is absolute shit and at the time I considered myself lucky. Given that half my class is unemployed and the other half work in similarly shitty jobs, I suppose I shouldn’t be complaining too much, but I feel all that stochastic calculus and derivative pricing theory is wasted.Wouldn't a quant (like someone who develops models , does back testing etc) apply those concepts more than a trader ? Why aren't you looking for quant positions first rather than going for trading ? I am a little unsure of all the various terminologies associated with various positions so maybe it is a stupid question.
Last edited by chaoticrambler on October 26th, 2009, 11:00 pm, edited 1 time in total.
 
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twofish
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October 27th, 2009, 1:45 pm

QuoteOriginally posted by: chaoticramblerQuoteOriginally posted by: StraightOuttaBO I feel all that stochastic calculus and derivative pricing theory is wasted.Wouldn't a quant (like someone who develops models , does back testing etc) apply those concepts more than a trader ?Not really. Stochastic calculus and derivatives pricing theory were really big topics a few years ago. They aren't that terribly useful for the problems that people are interested in right now.
Last edited by twofish on October 26th, 2009, 11:00 pm, edited 1 time in total.
 
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repoman
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October 27th, 2009, 2:09 pm

QuoteOriginally posted by: twofishQuoteOriginally posted by: chaoticramblerQuoteOriginally posted by: StraightOuttaBO I feel all that stochastic calculus and derivative pricing theory is wasted.Wouldn't a quant (like someone who develops models , does back testing etc) apply those concepts more than a trader ?Not really. Stochastic calculus and derivatives pricing theory were really big topics a few years ago. They aren't that terribly useful for the problems that people are interested in right now.Are you joking? I assure you that there are people interested in applying recent results in stochastic calculus.
 
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riskguru
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Joined: August 11th, 2004, 4:24 pm

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October 27th, 2009, 3:57 pm

It seems to me that part of the problem is that you are doing risk at a large bank where responsibilities are very partitioned/siloed, making it hard to plan for career growth. If you think you know risk/quant/trading go try to work for a hedge fund. Most will not have the patience to train you but if you add value it will be recognized. If you can't get in maybe that says something re: skill set/experience.
 
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twofish
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October 27th, 2009, 4:21 pm

QuoteOriginally posted by: repomanAre you joking? I assure you that there are people interested in applying recent results in stochastic calculus.There's probably someone working on something dealing with stochastic calculus, but I'm seeing nowhere near the interest that there was a few years ago.
 
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drews26
Posts: 116
Joined: April 22nd, 2003, 4:15 pm

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October 28th, 2009, 1:25 am

QuoteOriginally posted by: riskguruIt seems to me that part of the problem is that you are doing risk at a large bank where responsibilities are very partitioned/siloed, making it hard to plan for career growth. If you think you know risk/quant/trading go try to work for a hedge fund. Most will not have the patience to train you but if you add value it will be recognized. If you can't get in maybe that says something re: skill set/experience.Does anybody have a firsthand experience with risk management jobs in a hedge fund? I’m sure those roles exist only in big HFs/FoFs. In a big bank there’s market risk, credit risk and a few other groups dealing with risk. How different/similar HF risk management roles are compared to those in banks? I mean can CRO or whoever else force traders/PMs to exit positions if VaR or any risk exposure breaches the limit? Does Risk have any real power in HFs? One very senior Risk guy in a major bank once told me that the only purpose of having risk managers in a HF is to tell investors that they have a risk management group but Risk people have no real power. This guy worked in a bank his whole career but, as I said, is very senior (just below CRO), but I’m not sure whether what he said is actually true.
Last edited by drews26 on October 27th, 2009, 11:00 pm, edited 1 time in total.
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