Institutional bond trader?

Jan 3, 2010 8:36 pm

i know a guy who works as an institutional bond trader, rakes in significantly more money than any FA i know and works conventional hours. any one have experience in this field? what are the draw backs, and how can one start a career as a bond trader?

Jan 3, 2010 8:48 pm

I feel like there was another thread just like this.

Jan 3, 2010 8:55 pm

well, if you can find it, a link would be appreciated. otherwise, if you have any input, please do share.

Jan 4, 2010 1:43 pm

http://forums.registeredrep.com/forum_posts.asp?TID=10272&KW=institutional&PID=166102#166102

Jan 4, 2010 3:32 pm

no no. thanks we blanket, but that post is about institutional brokers and i’m asking about institutional trading – 2 different jobs: one is essentially a salesman, like most of us, only he covers institutional clients rather than retail clients. the other is a trader, and that’s the role i’d like a bit more insight about. mlgone, ur a f***in loser.

Jan 4, 2010 8:19 pm
twoeyeguy:

i know a guy who works as an institutional bond trader, rakes in significantly more money than any FA i know and works conventional hours. any one have experience in this field? what are the draw backs, and how can one start a career as a bond trader?

  I think most work up to full trader positions.  The one's I know started out as analysts, and worked their way up.  And it's only lucrative if you are on a for-profit trading desk.  For example, Jones bond traders are probably just salaried, as they don't trade for profit, they only trade for inventory.   But you also have to be good.  It's basically like day trading, but with huge numbers.
Jan 4, 2010 8:21 pm

Yeah, I don’t think there is a clear career path to become an institutional trader - you just end up there…like the Waffle House.

Jan 4, 2010 9:38 pm
Read Liar's Poker by Michael Lewis.   Traders are born, not made.   Good luck!  
Jan 4, 2010 10:04 pm

i wouldnt bother asking if i didnt think id be good at it.

Jan 4, 2010 10:05 pm
twoeyeguy:

i wouldnt bother asking if i didnt think id be good at it.

  How do you know you would be good at it? Do you know what it is?
Jan 4, 2010 10:09 pm

yeah, i think i have a pretty clear understanding of what it is. u spend most ur day on bloomberg looking for under-priced bonds to sell to institutional clients for a profit.

Jan 4, 2010 10:49 pm
twoeyeguy:

yeah, i think i have a pretty clear understanding of what it is. u spend most ur day on bloomberg looking for under-priced bonds to sell to institutional clients for a profit.

  You make it sound easy!   Start knocking on doors to get on a desk. If you have a connection, use it. Don't be surprised by the small salaries offered, if you get any offers, it's the education you're after.   Note that Lewis Ranieri, who played a heavy roll in the securitzation of the mortgage markets, eventually became Vice Chairman of Salomon Brothers, started in the mailroom. In between stints in the mailroom and the corner office he was a master bond trader. He managed that without a college degree, and if you believe some, without a high school diploma. He was fired by Salomon when they decided to professionalize the firm by only hiring grads of big ticket schools. Big mistake! Really stupid mistake that led to the firm's downfall.   As i said, born, not made.   Good luck!
Jan 5, 2010 12:08 am
twoeyeguy:

i know a guy who works as an institutional bond trader, rakes in significantly more money than any FA i know and works conventional hours. any one have experience in this field? what are the draw backs, and how can one start a career as a bond trader?

  You know a guy.........Have you asked this guy how he got started........If he could help you understand the path, possibly get you in the door somewhere, etc......
Jan 5, 2010 4:30 am
BondGuy:

[quote=twoeyeguy]yeah, i think i have a pretty clear understanding of what it is. u spend most ur day on bloomberg looking for under-priced bonds to sell to institutional clients for a profit.

  You make it sound easy!   Start knocking on doors to get on a desk. If you have a connection, use it. Don't be surprised by the small salaries offered, if you get any offers, it's the education you're after.   Note that Lewis Ranieri, who played a heavy roll in the securitzation of the mortgage markets, eventually became Vice Chairman of Salomon Brothers, started in the mailroom. In between stints in the mailroom and the corner office he was a master bond trader. He managed that without a college degree, and if you believe some, without a high school diploma. He was fired by Salomon when they decided to professionalize the firm by only hiring grads of big ticket schools. Big mistake! Really stupid mistake that led to the firm's downfall.   As i said, born, not made.   Good luck![/quote]   Bond Guy is being extraordinarily diplomatic.  It is not NEARLY as easy as you make it sound to find mis-priced bonds and trust me, there will be lots of traders much better and more experienced than you doing the same thing and eating your lunch on a regular basis.  Bond Guy is one of them.  It's going to take time and significant effort to be successful at institutional bond trading.  Listen to what he says and understand that you're not just going to magically fall into it.
Jan 5, 2010 4:55 am

i understand it wouldnt be easy. becoming a successful FA wouldn’t be easyy either. since were on the topic, what career do you guys consider more desirable? if you were just entering the biz which role would you pursue knowing what you know now - FA, or institutional broker/trader?



this question goes out to anyone willing to share some insight, and frustrated douchebags need not contribute. mlgone, kindly exclude yourself from the rest of this thread and find a cozy corner in which to go f*** yourself.

Jan 5, 2010 2:37 pm

I would still be an FA.  Once you are established, even though good traders can make a whole lot more, the quality of life and job security as an FA are much, much better.  As a trader, you are a hired gun.  I know of several traders that lost 500K a year jobs during the crash.  Good luck replacing that income. 

Jan 5, 2010 6:07 pm

good points B24. but you say a trader can make a lot more than an FA - by that do you mean that typically a trader will, on the average, earn more than an FA at a comparable stage of his career? clearly longevity favors the FA but i think id rather make a couple mill in 5 years and get the axe than make the same couple mill over the course of 15 years.    



and you mentioned the quality of life of an FA. can you elaborate?

Jan 5, 2010 6:58 pm

[quote=twoeyeguy]good points B24. but you say a trader can make a lot more than an FA - by that do you mean that typically a trader will, on the average, earn more than an FA at a comparable stage of his career? clearly longevity favors the FA but i think id rather make a couple mill in 5 years and get the axe than make the same couple mill over the course of 15 years.    



and you mentioned the quality of life of an FA. can you elaborate?[/quote]

Quality of life for an FA.  Low stress, work when you want (doesn’t matter if the market is open).  If you do it right, your FA business can be your retirement plan.  Really, it can generate streams of income for the rest of your life.  In a sense, it can even be an insurance policy, if you set up a buy-sell agreement with someone.

Quality of life for a trader.  High stress.  Work when the market is open.  You are only as good as your last trade (as BondGuy said somewhere).  Your retirement plan is likely some sort of 401k profit sharing plan, is likely finite and you cannot be a trader forever (maybe you can, but a lot of people burn out). 

Jan 5, 2010 7:58 pm
Moraen:

[quote=twoeyeguy]good points B24. but you say a trader can make a lot more than an FA - by that do you mean that typically a trader will, on the average, earn more than an FA at a comparable stage of his career? clearly longevity favors the FA but i think id rather make a couple mill in 5 years and get the axe than make the same couple mill over the course of 15 years.    

and you mentioned the quality of life of an FA. can you elaborate?[/quote]

Quality of life for an FA.  Low stress, work when you want (doesn’t matter if the market is open).  If you do it right, your FA business can be your retirement plan.  Really, it can generate streams of income for the rest of your life.  In a sense, it can even be an insurance policy, if you set up a buy-sell agreement with someone.

Quality of life for a trader.  High stress.  Work when the market is open.  You are only as good as your last trade (as BondGuy said somewhere).  Your retirement plan is likely some sort of 401k profit sharing plan, is likely finite and you cannot be a trader forever (maybe you can, but a lot of people burn out). 

  And it usually takes several years (like an FA) to become a well-compensated trader.  But there is no guarantee you will ever become that well-compensated trader (nor is there any guarantee of becoming a good FA).  But the long-term rewards of an FA are much better.  Just a much better risk/reward ratio.  Let's assume you "make it" as an FA.  Even if you don't make a ton of money, you will likely have a very nice lifestyle, and can work well into your 70's if you so choose (I have known a few to work into their early 80's, come in for 3 hours, put through a few bond orders, and go home).   Very few really well compensated bond traders work into their later years.  It's sort of like being a pro athlete - short shelf life, you burn through too much cash thinking you will make that kind of coin forever, and then you burn out.
Jan 6, 2010 7:23 am

the fact that u can work when the market is closed as an FA seems like a double edged sword though. as a trader ur out of that office by 5 oclock (probably more like 4:15) knowing there’s nothing more u can do till the next morning. as an FA it seems like u kind of have to be “on” around the clock, and work is never truly done.



question… what’s the vacation situation like when ur at a wire? it would seem to me that u should be able to take some vacations pretty easily as long as ur phone is never too far away. is that usually the case, or does it not work like that?

Jan 6, 2010 4:10 pm
twoeyeguy:

the fact that u can work when the market is closed as an FA seems like a double edged sword though. as a trader ur out of that office by 5 oclock (probably more like 4:15) knowing there’s nothing more u can do till the next morning. as an FA it seems like u kind of have to be “on” around the clock, and work is never truly done.

question… what’s the vacation situation like when ur at a wire? it would seem to me that u should be able to take some vacations pretty easily as long as ur phone is never too far away. is that usually the case, or does it not work like that?

  The fact that you have freedom to choose your hours as an FA is not a double edged sword as long as you have a good work ethic.  Bond traders are in the office EARLY (before I wake up!), and are working when the market is open, period.  They are not taking days off to see their kids play, they are on the desk.  If a big client calls in to ask for paper and you are not there he finds a replacement.  Tough world; high stress is just the beginning.  And they don't often make more than advisors.  Some make more than MOST advisors, some make less than MOST advisors, but there are extremes on both sides of the industry.   Once you have been a successful advisor for a few years you can back off the throttle and let your book build intrinsically.  You don't need to be in at 8 and leave at 6 or 7, you can take lunches and days off.  I know a guy who works one week per month in NY.  He moved to Boca (or Naples, I forget) and has his team manage the business while he down there.  Once a month he flies up to NY for one week and has his staff line up meetings with every client.  He starts first thing Monday morning and works until Thursday evening then goes home (and makes a hell of a living!).  You can't do that as a trader...    
Jan 6, 2010 6:19 pm

damn shantom, how late do you wake up? the bond trader i know and mentioned before gets to the office no sooner than 8am. and he’s out by 4:30-5.

Jan 6, 2010 6:28 pm
shantom1:

[quote=twoeyeguy]the fact that u can work when the market is closed as an FA seems like a double edged sword though. as a trader ur out of that office by 5 oclock (probably more like 4:15) knowing there’s nothing more u can do till the next morning. as an FA it seems like u kind of have to be “on” around the clock, and work is never truly done.

question… what’s the vacation situation like when ur at a wire? it would seem to me that u should be able to take some vacations pretty easily as long as ur phone is never too far away. is that usually the case, or does it not work like that?

  The fact that you have freedom to choose your hours as an FA is not a double edged sword as long as you have a good work ethic.  Bond traders are in the office EARLY (before I wake up!), and are working when the market is open, period.  They are not taking days off to see their kids play, they are on the desk.  If a big client calls in to ask for paper and you are not there he finds a replacement.  Tough world; high stress is just the beginning.  And they don't often make more than advisors.  Some make more than MOST advisors, some make less than MOST advisors, but there are extremes on both sides of the industry.   Once you have been a successful advisor for a few years you can back off the throttle and let your book build intrinsically.  You don't need to be in at 8 and leave at 6 or 7, you can take lunches and days off.  I know a guy who works one week per month in NY.  He moved to Boca (or Naples, I forget) and has his team manage the business while he down there.  Once a month he flies up to NY for one week and has his staff line up meetings with every client.  He starts first thing Monday morning and works until Thursday evening then goes home (and makes a hell of a living!).  You can't do that as a trader...    [/quote]   Whoever told you about my practice got it wrong, my office isn't in NY.
Jan 6, 2010 6:34 pm

i expected some dumbass to jump up and say that. but from what i’m hearing here about the quality of life of an FA, all this flexibility should easily be translatable into some vacation time a couple times of year, no? without being excessive, of course… otherwise what kind of flexibility are we really talking about? the freedom to chose between 8am-6pm and 9am-7pm?

Jan 6, 2010 6:50 pm

2I,

  I think you're missing the point.  When you are an FA, even if you work as an employee, your employer doesn't care if you come in 50 hours a week or 50 hours a year, as long as you can generate profitable income for the firm.  If you are never in, your clients may eventually walk, but how often do you talk to each client? You can structure your practice so that you make all your client calls during one week a month (make 10-20 calls a day).  You can work from home.  You can work from the villa in Tuscany, it doesn't matter.  And frankly, other than reviews and advice, your assistants, or partner FA's can answer most questions.   Now, while you are BUILDING your business, you are going to work some serious hours getting it going.  But that's a function of building any business. 
Jan 6, 2010 6:51 pm

two-eye.  The freedom is whatever you want it to be.  I worked over the holidays like a madman because I wanted to, yet took a month off in July.  I’ll take two weeks off in April.  I’ll also be gone for six weeks this summer in Europe.

The initial choices may be between 7 a.m. and 7 p.m. (or even 9 p.m.), but after you’ve gotten things going, built a reputation, you can slow down.

Not to mention you can pick up your kids from school early.  Go see games.  Grab a nooner with the wife that could turn into an all-day thing.  Go to a matinee.  The gym for a few hours.  Go for a run.  Wake up and want to go golfing?  Go for it. 

You won’t be doing that at the bond desk.


Jan 6, 2010 6:53 pm
twoeyeguy:

i expected some dumbass to jump up and say that. but from what i’m hearing here about the quality of life of an FA, all this flexibility should easily be translatable into some vacation time a couple times of year, no? without being excessive, of course… otherwise what kind of flexibility are we really talking about? the freedom to chose between 8am-6pm and 9am-7pm?

  Who are you calling a dumbass, the guy who is telling the truth (mlgone) or the guy who was making a joke that had nothing to do with you (me)?   In either case, you are clearly not a RR and therefore shouldn't even be posting here, so maybe you should go back to working at Best Buy and not worry about what the adults do for a living.
Jan 6, 2010 6:53 pm

One caveat - if you want to be a traditional transactional stock or bond broker, you are likely going to have to be in the office more hours making sales calls.  But if you are generally fee-based (or fee-only), your time required on the phone and in the office will drop considerably.

Jan 6, 2010 8:05 pm

I am an RR, not that it’s really any of ur business. the dumbass i was referring to is mlgone, but ur quite the douche as well.

Jan 6, 2010 8:10 pm

Irish Sunglasses anyone?

Jan 6, 2010 8:50 pm

no, not a successful or established one. i am very much so at the beginning of my career, posting on this forum to gain some insight from more experienced reps. i dont want to get dragged into unproductive bullsh*t with a punk who likes to act like a tough guy on an online message board.

Jan 7, 2010 2:50 pm
twoeyeguy:

I am an RR, not that it’s really any of ur business. the dumbass i was referring to is mlgone, but ur quite the douche as well.

  Wrong, mouthbreather. It is my heart-felt moral obligation to make sure that stupid people do not pollute the bastien of intellectual debate that is the RR forums. Not that it matters what you think is my business or not...if I feel like telling you to go back to your Best Buy job, I will.   Now, on to the real point. You should quit. Seriously. Go to whomever hired you and tell them you aren't cut out for this job for two reasons:   1) The word "vacation" should never enter your mind until...well when doesn't matter because you'll never get there. If you want vacation time, go be a school teacher. It's a noble profession, you'll make more than the national average in salary in most cases, and you only work 9 months a year. That was the point that "dumbass" mlgone was making.   2) If you are too sensitive to take the criticism (though veiled in insults) offered here, you will never make it. This job is about work ethic and tolerance for rejection in the first couple years. Seems you have neither.   Bonus reason  #3:   You lack the basic understanding of the English language to communicate effectively. I mean, "ur"? Really? What are you, a high school cheerleader?  
Jan 7, 2010 6:11 pm

Listen, gimp. I realize the begining is tough and vacation time is not a reality in the early stage of this career. However, if u weren’t a f***in idiot, you’d see I was asking about the quality of life of an established FA, as opposed to that of a trader. I knew that as soon as I brought up the word “vacation” some moron with knee jerk reaction to the word, and a lack of basic reading comprehension, would get all up in arms about it. That moron, predictably, was mlgone. I could have also guessed that there would be another idiot that has nothing better to do than be mlgone’s assistant shmuck on a Thursday morning.

Jan 7, 2010 6:29 pm
twoeyeguy:

Listen, gimp. I realize the begining is tough and vacation time is not a reality in the early stage of this career. However, if u weren’t a f***in idiot, you’d see I was asking about the quality of life of an established FA, as opposed to that of a trader. I knew that as soon as I brought up the word “vacation” some moron with knee jerk reaction to the word, and a lack of basic reading comprehension, would get all up in arms about it. That moron, predictably, was mlgone. I could have also guessed that there would be another idiot that has nothing better to do than be mlgone’s assistant shmuck on a Thursday morning.

  Golly, you sure showed me! You are certainly correct, I completely misread the statment below to mean you had a question about vacation time! You obviously meant something else. Thanks for clarifying with poor grammar and nondescript insults, I would never know I was an idiot otherwise:   "question... what's the vacation situation like when ur at a wire? it would seem to me that u should be able to take some vacations pretty easily as long as ur phone is never too far away. is that usually the case, or does it not work like that? "   Now I'm off to limp away and sulk in the irony that you comment on my "lack or reading comprehension" while misspelling "beginning" and "you" (because adding the additional keystrokes necessary to type the 'y' and 'o' can be a burden).
Jan 7, 2010 6:43 pm

reduced to correcting my grammar and spelling… that was quick

Jan 7, 2010 6:51 pm
twoeyeguy:

reduced to correcting my grammar and spelling… that was quick

    That's right, avoid the real point I made...you know, the one where you denied saying something that you had clearly said in an earlier post.   Don't worry, nobody will notice you are changing the subject.
Jan 7, 2010 7:02 pm

i was talking about vacation time as a function of flexibility in the career of an established FA, and in contrast to that of a trader. it was clear when i first said, clearer when i reiterated it shortly thereafter, and i’m not sure why i’m repeating myself again when all you had to do was scroll up to see it. your input is not welcomed anyway so just don’t concern yourself with it. when i need someone to look over my spelling ill get back in touch with you, but this conversation is over. move on, moron.

Jan 7, 2010 7:24 pm
twoeyeguy:

i was talking about vacation time as a function of flexibility in the career of an established FA, and in contrast to that of a trader. it was clear when i first said, clearer when i reiterated it shortly thereafter, and i’m not sure why i’m repeating myself again when all you had to do was scroll up to see it. your input is not welcomed anyway so just don’t concern yourself with it. when i need someone to look over my spelling ill get back in touch with you, but this conversation is over. move on, moron.

  Clearly my input is welcome. I am pretty sure you sat at your computer and reread your entire post three times to make sure you didn't misspell anything. You're welcome, you may be able to go get your GED now that you've demonstrated that you know the basics of middle school English.     And you don't need to repeat yourself. You are a liar anyway, nobody really cares what you are saying.    
Jan 7, 2010 8:29 pm

not the first thing i ask, just one of the things. i dont give a f*** that u get off by acting like youre such a hard worker that vacation and personal time arent an issue for u. im a well rounded person and id like to keep it that way by choosing the right career path. the fact that u act too good for vacation time is laughable - youre on here posting and making dumb comments all the f***ing time when you could be working. and for the record, im not a successful FA because ive only been registered for 2 months. now do me a favor, you and your butt buddy go find something else to do during business hours and don’t respond to my posts any more.



anyone else, if you have any input with regard to the life style and flexibility afforded FA’s 2-10 years into their career, and whether that translates into ample vacation time or not, please put in your .02. Thanks

Jan 15, 2010 8:07 pm

Who cares what will be better when you’re unlikely to be either. No offense but the likelihood of failing as an FA during the first two years are extremely high. You should be focusing on picking up the phone and seeing how many qualified people you can get to say ‘yes’ on the other end. If you ‘know a guy’ why aren’t you asking the guy that does it how to get into it instead of FA’s? You also started a thread about hedge fund managers and how to become one??? You’re clearly in the wrong career if you’re worrying about all the other investment industries out there. And if you think being an inst. bond trader is as easy as finding under-priced bonds then I hope you don’t think being an advisor is just picking a couple stocks in your E-trade account. Focus on not having your BOM call you into their office to explain your options of resigning or being fired.



“That’s it, I’m done!!!” -Jim Young, Boiler Room   

Jan 15, 2010 10:29 pm

i want to thank to everyone who’s making a positive contributions. i appreciate your insight. and the negative ones, you have nothing to get all worked up about. i’m just a young guy trying to gain an understanding of the big picture so i can align myself to get the biggest slice of the pie i can down the road. maybe if you had the same foresight early on you wouldn’t be such bitter disgruntled assholes now.

Jan 16, 2010 5:48 pm

[quote=twoeyeguy]i want to thank to everyone who’s making a positive contributions. i appreciate your insight. and the negative ones, you have nothing to get all worked up about. i’m just a young guy trying to gain an understanding of the big picture so i can align myself to get the biggest slice of the pie i can down the road. maybe if you had the same foresight early on you wouldn’t be such bitter disgruntled assholes now. [/quote]

Seriously, I am saying this in all sincerity. People on this forum are giving you what you are asking for, honest insight. On this and the other thread people have given you an “understanding of the big picture”. As plainly as it can be said, this is a destination career, not really a stepping stone, because by the time you are established you will be making more money than most people that you know working half as hard with tremendous lifestyle flexibility.

And as far as people being “disgruntled assholes”, you don’t know what you don’t know, and that’s your problem. People react to you the way they do because you are asking absurd questions. A few people on this forum have been nice enough not to hand you your teeth are being kind, I promise you the rest are being “disgruntled”, or are just rolling their eyes at someone who doesn’t know what they are asking.

With that said, if you don’t want to do this job, or want to do something else, don’t waste our time or yours (or your firms). Leave, become an intern. Don’t do your prospective clients and employer the disservice of engaging in business activity with you when you are focused on something else. This is an all or nothing career.


Jan 16, 2010 6:29 pm

fair enough sometimesnowhere. i’ve made a decision to devote my all to making it in this career and i will be starting a new job next week. i’m committed, and i will make an effort to keep my subsequent posts more relevant to this forum. that said, expect a lot of posts fishing for advice on how a young, unconnected newcomer with a virtually nonexistent network of wealthy people might be able to make it in this industry.

Jan 16, 2010 8:40 pm

Most likely your first step is to get hired on a trading desk as a gopher/admin grunt.  Ask questions, observe and make dam sure that whatever task you are given to do is completed PERFECTLY.  You are being observed and graded.  Several months down the road you may be trusted to answer phones and relay messages.  If you are lucky, one of the traders may spend some time with you and explain what he/she does and how they do it. 

A trader has 2 jobs- 1) satisfy their cleints- the salesmen who sell their paper and 2) work the street and bid paper from clients, trying to find paper that can be resold for a profit.  Job 1 will be visible to you.  Job 2 will largely be invisible to you at first, but is what ultimately determines success or failure.  Bonds are commodities- 90% of what a large institutional buyer sees is available from several different sources.  It is the 10% of unique paper / situations that sets each desk apart and provides value to the end buyer. 

Over time, if you are thought to be ready, you may be trusted to trade on an Agency basis- you hold no positions, risk no capital, and only fill orders.  You may become a “Liason” trader between the desk and a retail salesforce–ie you are barrier to prevent the retail brokers from contacting the actual traders.  If you are lucky and patient (several years down the road) you may be given the opportunity to actually trade- risk the firms capital.  This is where the real money is made by the firm and by you.  If you are a full trader, your compensation will likey be a low six figure salary and 7 figure bonus potential.  You will then have the potential to be a “BSD”.

Given the state of the industry, consolodation, move to electronic trading, many many qualified people have left the bond industry.  It will be very difficult to find even a menial job on a bond desk.

Good Luck.