THE TRADING PITT

OCTOBER 18TH, 2010

 GETTING INTO FINANCE

• Want a career on Wall Street?

• Why do you want a job there?
• Most Competitive
• Best Paying
• Best Opportunities
• Great Location
• Perks
• Why is a finance degree not enough?
• Should I get an MBA?
• Paper
 INVESTMENT BANKING

• Biggest Companies
• Bank of America, Morgan Stanley, UBS, JP Morgan, Goldman Sachs
• Boutique Firms
• Salaries
• 60-90k base + bonus
• Hours
• Analyst vs. Associate
• Associate needs MBA
• Managing Directors
YOUR JOB AS AN INVESTMENT BANKER

• Working 80+ Hours

• Leveraged Buyouts, Mergers and Acquisitions, Capital
Raising including IPO’s
• Equity and Debt
• Making Pitch-books
• Of each deal including valuation, objectives, concepts.
• Work for the sales desk
• Meeting with potential clients
 INVESTMENT BANKING RESOURCES
WHILE IN SCHOOL
• Take a class on Investment Banking
• Check out Mergers and Inquisitions Blog and Premium
Content
• http://www.mergersandinquisitions.com/
• Check out Wall Street Self Study on YouTube
• http://www.youtube.com/user/wstss#p/u
• Learn Excel and Powerpoint
 SALES AND TRADING

• Biggest Firms
• Major investment banks
• Brokerage Firms
• Salaries
• 100k all included
• Within an Investment Bank Usually
• You can also go to work for retail institutions
• TD Ameritrade, Charles Schwab, etc. for Less Pay
• Fixed Income and Credit are the most profitable
• Need Licenses at least 7, 63
 YOUR JOB

• Depends on the product to a certain degree

• Derivatives, Equity, Structured Products
• But your main task is to be a market maker
• Client calls with an order say sell 40,000 shares BAC you make
a price of 17.00 market price is 17.15.
• You make money off charges per share,
• Make money off the spread between the market price.
• Try to beat VWAP (Volume Weighted Average Price)
• Spread order out over a period of a day
• Actively trade the shares
• For institutional players, sales and trading is generally separate.
 SALES AND TRADING RESOURCES

• Learn more about Market Making

• Use Pitt’s Software
• Practice Trading intraday and over several days
• Market Microstructure
• How orders large effect prices
• Utilizing ECN’s (Electronic Communication Networks)
• Level II Techniques
• Beating HFT (High Frequency Trading)
• Using Dark Pools
• Finding deep liquidity
 PROPRIETARY TRADING

• Similar to the Hedge Fund Model but you trade your firm’s
money.
• You make a payout as a percentage of your profits
• The firm absorbs you losses.
• No upper limit usually
• Cheaper commissions
• Stocks, Options, and Futures are the three most traded
products.
• New York is the center for Equities and Chicago Futures.
 YOUR JOB

• Intraday Trading and Swing Trading

• Algorithmic Trading
• High Frequency Trading
• Discretionary Market Making
• Extremely Competitive
• Make buy and sell decisions at your own command
• Doing real work sooner
• Technical setups primarily and short term
 RESOURCES

• Open your own trading account and start keeping a track

record and journal
• Reading Blogs and Books
• Check out T3 Live and Stocktwits
• T3’s Youtube Channel http://www.youtube.com/user/t3live
• Market yourself as a trader to firms
• You can knock all the competition out of the park with some
actual experience trading everything
 QUESTIONS?

• Send us an email at thetradingpitt@gmail.com