A word to those who want to be traders…
In Chicago, there are two distinct categories of careers in trading. Black box, and open outcry. The two worlds are vastly different, and often at odds with each other. New school versus old school. But, they have a few important things in common from a career-planning perspective. Here is a breakdown on the trading profession in Chicago as I see it, having met last week and over the past few years with a variety of banks, proprietary trading firms, hedge funds, commodities traders, and affiliated organizations.
Black box, or algorhytmic trading, is the career path for a highly technical individual who can write code. If you are what I would affectionately refer to as a “super nerd,” and you can write computer programs that execute profitable trades for you, then you can compete in the job market in Chicago. The personality profile is ideally a person who can handle trememdous pressure and is not affraid to take risks. But many are also quiet, introverted types. The most successful often hold hefty degrees from ultra-prestigious colleges and universities. Financial Engineering is a degree frequently held by these algo folks.
The open outcry community is comprised of generation after generation of traders. The floor of the CBOT (Chicago Board of Trade) and CBOE (Chicago Board Options Exchange) look similar, though less densely populated, to the scene from “Farris Beuller’s Day Off” where Farris and friends tour the floor of the CBOT. Wild hand gestures, shouting, small pieces of paper flying everywhere, unhealthy snack wrappers littering the floor. Pits of traders move the markets, buying and selling options, equities, futures and other derivatives, as well as agrigultural and other types of commodities. This is the old school, and many say that it is dying as black box slowly takes over. Instead of being up in an office in the Board of Trade builing sitting in front of a computer, they are down on the floor, in the pits, shouting. Their fathers and grandfathers before them were traders. Or, at the very least, someone they know very well has some influence in the trading world and helped them get the job, and they still had to clerk for a couple of years before they started actively trading. This is a grittier and more boisterous man or woman, generally speaking. Aggressive, quick witted, able to think on his or her feet. And I do mean his or her, because there is a suprising number of women in the pits.
There are some very successful individuals who have done or do both types of trading. Typically, they made a lot of money many years ago and have assembled a small team who are now using both methods to hopefully turn that money into more money.
Some qualities that are advantageous to have on one’s resume for either the algo or open outcry path include a love of gambling (e.g. poker or other odds games), sports (or competitive endeavors), and/or chess (or other brain teasers). A demonstrated passion for finance and the markets is key to both. An apparent, undying passion for trading and a burning desire to do nothing else but trade every day for the rest of your life is important. Statistical math, engineering, computer science, or other technical training is beneficial. Also paramount to both: NETWORKING! Like in so many fields in every city, it is all about who you know! Use the Freeman alumni network to open doors if you don’t have any personal connections in the market to speak of. A number of engaged, successful Freemn alums are working in related jobs in Chicago and would be more than happy to mentor and refer you if they deem you worthy of sticking their own neck out for. You can find them in the “Networking” tab on Freeman Link by doing a search for “Chicago.” We are also cultivating relationships with a number of proprietary firms (or “prop shops,” as they are called)that have trader taining programs, so stay tuned to Freeman Link for ‘trader trainee’ job postings in the fall.
In any case, many say that the trading profession–given today’s markets–is not the sexy, get-rich-quick career path you young whippersnappers might go into it expecting. I highly suggest finding some mentors in the business and doing some well-informed soul searching on whether it is the right profession for you. Be ready to work very hard to get an opportunity and then prove yourself in a highly cut-throat environment.
For the rest of you, aspiring traders or not…
Chicago loves the Freeman School! Our alumni network there is strong. Comprised of high-ranking professionals at prestigeous financial institutions, marketing firms, consulting firms, Fortune 500 companies and trading shops, the group is more than willing to assist Freeman students in finding jobs in the area in any way they can. Freeman Days Chicago, taking place October 25 – 26 this year, will be a great opportunity for you to network with these alumni and explore career opportunities at their organizations, as well as other exciting companies who are already signing on to participate. Stay tuned to Freeman Link for more details!
In addition to being a superb job market, Chicago rivals New York in its metropolitan splendor. It is ultra clean, riddled with spectacular parks and green spaces, stunning architecture, interesting history, a magnificent lake and a beach right downtown! The winter climate is inhospitable, but the payoff comes in summer, when everyone wears a bright smile and takes advantage of the warm weather and fertile culture the city offers in abundance. Amazing food, including every type of ethnic cuisine you could want. Fun outdoor activities, live music, world-class museums, ethnic and religious diversity, midwestern charm. Chicago has it all in spades.
The professionals in Chicago are… well… professional! Effective and courteous and great at returning calls and emails. There is a low turnover rate in the companies I have relationships with, even among the recruiters, which is atypical for the recruiting profession. To me, it’s a good indication that the corporate culture is generally fulfilling and productive, much like every aspect of life in the city.