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Pursuing a Career in Finance: Insights from The Trading Pitt

Explore the essentials of building a successful finance career, particularly on Wall Street, with insights on high-paying opportunities, crucial degrees like MBAs, and the competitive landscape. Understand the roles within investment banking, including analysts and associates, and the demanding hours involved. Delve into salary expectations, trading strategies, and resources for honing your finance skills. Whether you're interested in investment banking, market making, or proprietary trading, this guide offers crucial information for aspiring finance professionals.

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Pursuing a Career in Finance: Insights from The Trading Pitt

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  1. The Trading Pitt October 18th, 2010

  2. Getting into Finance • Want a career on Wall Street? • Why do you want a job there? • Most Competitive • Best Paying • Best Opportunities • Great Location • Perks • Why is a finance degree not enough? • Should I get an MBA? • Paper

  3. Investment Banking • Biggest Companies • Bank of America, Morgan Stanley, UBS, JP Morgan, Goldman Sachs • Boutique Firms • Salaries • 60-90k base + bonus • Hours • Analyst vs. Associate • Associate needs MBA • Managing Directors

  4. Your Job as an Investment Banker • Working 80+ Hours • Leveraged Buyouts, Mergers and Acquisitions, Capital Raising including IPO’s • Equity and Debt • Making Pitch-books • Of each deal including valuation, objectives, concepts. • Work for the sales desk • Meeting with potential clients

  5. Investment Banking Resources While in School • Take a class on Investment Banking • Check out Mergers and Inquisitions Blog and Premium Content • http://www.mergersandinquisitions.com/ • Check out Wall Street Self Study on YouTube • http://www.youtube.com/user/wstss#p/u • Learn Excel and Powerpoint

  6. Sales and Trading • Biggest Firms • Major investment banks • Brokerage Firms • Salaries • 100k all included • Within an Investment Bank Usually • You can also go to work for retail institutions • TD Ameritrade, Charles Schwab, etc. for Less Pay • Fixed Income and Credit are the most profitable • Need Licenses at least 7, 63

  7. Your Job • Depends on the product to a certain degree • Derivatives, Equity, Structured Products • But your main task is to be a market maker • Client calls with an order say sell 40,000 shares BAC you make a price of 17.00 market price is 17.15. • You make money off charges per share, • Make money off the spread between the market price. • Try to beat VWAP (Volume Weighted Average Price) • Spread order out over a period of a day • Actively trade the shares • For institutional players, sales and trading is generally separate.

  8. Sales and Trading Resources • Learn more about Market Making • Use Pitt’s Software • Practice Trading intraday and over several days • Market Microstructure • How orders large effect prices • Utilizing ECN’s (Electronic Communication Networks) • Level II Techniques • Beating HFT (High Frequency Trading) • Using Dark Pools • Finding deep liquidity

  9. Proprietary Trading • Similar to the Hedge Fund Model but you trade your firm’s money. • You make a payout as a percentage of your profits • The firm absorbs you losses. • No upper limit usually • Cheaper commissions • Stocks, Options, and Futures are the three most traded products. • New York is the center for Equities and Chicago Futures.

  10. Your Job • Intraday Trading and Swing Trading • Algorithmic Trading • High Frequency Trading • Discretionary Market Making • Extremely Competitive • Make buy and sell decisions at your own command • Doing real work sooner • Technical setups primarily and short term

  11. Resources • Open your own trading account and start keeping a track record and journal • Reading Blogs and Books • Check out T3 Live and Stocktwits • T3’s Youtube Channel http://www.youtube.com/user/t3live • Market yourself as a trader to firms • You can knock all the competition out of the park with some actual experience trading everything

  12. Questions? • Send us an email at thetradingpitt@gmail.com

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