A day in the life of a Wall Street Trader

This is what I guess is a typical day in the life of a Wall Street flow trader. I know a few good friends doing this and at times I have worked closely with several trading desks on strategic trade ideas. So I have a descent idea of what a junior flow trader does.

5:30AM: You wake up, You tell yourself it’s all worth it for the financial freedom one day and you get yourself out of the bed. You glance at your blackberry and look at your overnight emails from your counterpart Asian/European desks. And then you begin getting ready for work.  6:00 AM: The bank you work at is fairly casual but you still wear a dress shirt and dress pants to work. You have your suit jacket and ties at work. Just incase you need it. You start heading for work. You live close enough to your workplace in NYC so either you can walk or take the train.

6:30AM: Before you get into work you step into the Starbucks and get coffee for your boss and his co-traders. Gotta pay your dues (whatever that means). This is even worst for interns. I think they have to do this for the entire trading desk.

7:00AM: Once you walk in you start looking at the open trading positions and see what needs to be hedged. You look at the market data and news to analyze what’s up for the day. You check all your greeks and all your risk profile. Essentially you want to be flat on the day. You see your boss making/closing some trades. Sales guys have sent you about 10 emails asking you for various bids/asks.

11:00AM: You work with your boss to answer those queries and fill orders that come back. Again you check your risks and hedge out anything that you can. The goal is to be flat by the end of the day. You start BSing with brokers and asking them for leads on new trades and ask them if anyone wants to trade with you. Remember you’re looking to hedge out the risks and live for volume. You also ask the broker for some trading data, so you can analyze order patterns and when the market starts moving. Also you want to check out the data because you have some brilliant trade idea that you want to show off to your boss. You have also been reading various research and news reports online. On your Bloomberg chat, around 10 clients (junior traders) have been messaging you questions from what you were upto this weekend to what you’re doing next weekend to what you’re doing tonite to trade related questions. Some might be just trying to get some useful trading information out of you. So you have to be careful.

12:30PM: You’re hungry and you want to eat. You can already smell the free greasy broker food near your aisle. But you can’t eat yet as your boss is talking to the sales gal (wink) and grabbing food. And you also have to book several trades and mark the risks.

1:30PM: You’re starving by this point. You look around not much is going on. Traders are talking about next round of layoffs. You’re wondering if you will get laid off. Things have died down a bit at this point. You go grab the greasy burgers and start bsing with the other junior traders and your boss. Your boss tells you have a year or two year ago, he made tons of money of this dumb trader at such and such fund. And now that trader wants to do another trade with your boss. Your boss will have to trade with this guy now even if he takes loss to maintain relationships. Relationships and knowing people is everything in trading because a lot of the products are over the counter. You may think you have great trade ideas but if no-one is going to trade with you then it’s useless:

3:00PM. A few more last minute requests have come in from the sales desk. You and your boss work hard to meet these requests as they are from a big client. Remember, more volume means more pay. So you want to fill the order quickly and at a good price. You might check what other guys might be willing to bid at through brokers. But you don’t want any one to have a wiff that you’re going to make this trade because someone can outsell you. So you break the trade into different legs and ask around for prices till you get a complete picture. You want to make sure you’re offering good enough offer that allows for profit and is reflection of the market. In this sort of situation, getting market players to take a reverse side of your client’s trade is an ideal way to trade. No large risk on your books this way.

5:30PM. Your boss has left early today and you’re responsible for marking the risks and calculating pnl for your book. Your boss already has a good idea of what it would be but you run the numbers again and verify it and close the books. You argue and go back/forth with the risk desk to mark your positions correctly as they are off by some amount. You want to get this correct because overtime these errors add up and can prove costly to your year-end bonus. You email your boss the final amount before leaving.

7:00 PM. It’s time to go home now. You’re wondering if you should go to a broker open bar party. Last time you went you got back home at 2:00am at night.

Most important message is that broker/dealers make money through volume. More volume the more money the investment bank makes.

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