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Ex-Goldman trader’s brilliant student presentation on what trading jobs in investment banks really entail

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Do you want to leave university and become a trader in an investment bank? You might want to check out our guide to jobs in sales and trading. You might also want to check out the presentation below from Anton Kreil, the ex-Goldman Sachs trader who runs the Institute of Trading and Portfolio Management and who declared earlier this week that young traders in investment banks are only earning £11 an hour.

You can see Kreil’s full presentation here.  In the meantime, we’ve pulled out the best bits (click to enlarge where necessary).

Where the traders sit in investment banks, asset management firms and private wealth managers: 

Kreil structure of investment banks

 

 

What traders in investment banks really do: 

Market makers

What market makers in investment banks really do: 

Market making 2

How does agency trading work?

Agency trading

How does the ‘risk business’ of a market making trader work? 

Risk business

Risk business example

According to Kreil, most trading jobs in investment banks now require limited skill and involve monitoring computer algorithms. Most of the ‘risk business’ of market making is now undertaken using computer algorithms says Kreil (as is the agency business). Traders often have multiple positions open at any one time and algorithms are better able to deal with this complexity than human beings.

“There is very little skill required in trading in an investment bank these days, because execution doesn’t require a human!” says Kreil.

Comments (7)

Comments
  1. was this guy really a trader?

    “commissions for the bank are typically 5bps”
    never heard anything more nonsense like that – if you charge 5 bps on a plain vanilla interest rate swap you will probably not win a single trade for the foreseeable future
    vice versa if you charge 5bps on a complex structured trade the bank will probably (and rightly) fire you straight away, given you are exposing the bank to a number of unhedgeable complex risks and you are not getting paid enough for that…

  2. This guy is a joke, clearly has no clue or is trying to disinform people.

  3. He just wants to push his own biz. Never read so much bullsh*t in one presentation. He has no clue on what he is talking about. Leave the asset management business to the guys with the bigger balls than you probably have and please continue to eat the breadcrumbs that fall off the table while the big boys earns the $$$.

  4. students could probably care less about trading.. i mean like kids now a days are making money off each other by helping do homework on 5spot. Trading is confusing but i mean once you get started and you like it by all means go for it. Great article by the way good demo on what trading agencies do !

  5. comments below clearly from traders that dont get paid anymore and are in denial as salaried company men…

  6. This article was really helpful to me. I challenged two investment banks in my interviews recently because of this and they kept avoiding the structural decline issue and the salary + hours worked issues for traders and graduates now joining the industry. It was very obvious that they were looking for “starry eyed believers” in their model when in reality the model is broken and there are no opportunities at the banks anymore to do well. After experiencing this and revisiting this article I find the comments from people here ridiculous, especially when they claim to be working in the industry as traders. You very clearly do not get paid anything like what traders got paid before the financial crisis but you work just as long and hard. The opportunities are clearly less!

  7. this is an awesome presentation!

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