Myth busting for would-be investment bank workers

This post originally appeared on the Careers in the City blog.

trading

Well I need to be brilliant at maths right?
Not necessarily! All complex mathematical computations are handled by the quants who write algorithms to automate calculations. As long as you have decent mental arithmetic capabilities, you’re going to have enough mathematical ability to trade. Trading is a lot more about data assimilation and forging strong links with your team, and other players in the market – communication skills are key.

In more complex parts of an investment bank (e.g. structured trading) mathematical ability will need to be higher, but this represents perhaps only 10% of the trading population within an investment bank.

Am I going to get into trouble if I make losses?
Again…not necessarily! As long as you trade to your mandate (see point below) and can justify and defend your decisions, you’ll tend to be fine. Unless losses mount up over time…

I want to trade currencies, oil, bonds and…
…only if you work in a hedge fund, and possibly not even there. All traders receive a mandate which stipulates with whom they may trade, in which currencies, on which markets and precisely how much risk they can take on (measured as VaR or Value at Risk – the maximum they can lose at any one point if markets turn against them). Typically the markets they may trade will be heavily restricted, so they probably won’t be able to trade all of those things they mention, at the same place.

Will they be interested in someone with a degree in English or a 2:2?
Absolutely! There are people with extremely varied educational backgrounds on any trading floor and inside any investment bank – performing a variety of functions. It is a meritocracy. This means people with all manner of degrees who may have shown very strong abilities and moved across from other areas within the bank. As long as you have the skills to work in a particular area within an investment bank, there is nothing to preclude you.

I didn’t get a place on any graduate scheme. Does this mean I should give up?
Nope! And certainly not if it’s something you strongly want. The vast majority of recruitment into investment banks is done via specialist recruitment consultant firms. They will typically only want to hear from graduates who are ready to work (so get in touch with them after you have your results). To boost your chances, it may be a good idea to consider temporary contracts since an increasing number of City firms are using these to filter graduates into permanent roles upon completion of their temporary period.

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