MFE to trader?

[mzhou]

Hi, everyone. I'm new here, and interested in applying for fall 2007. I have a question. Can MFE program prepare me to become a good Wall St trader? FX trader? stock or fixed income trader? Thank you.

 

[Andy Nguyen]

I don't think any specific degree will guarantee you a trader job upon graduation, specially for entry-level graduates. You have to pay your due before you can become a trader. Some of graduates from our program are currently traders for big investment banks.
That said, I think with a MFE degree, your chance of becoming a trader is great since trading job has evolved to require many skills such as programming, math, finance and MFE program provides just that.

If the rumors about automated trading being the future of trading turn out to be true, then MFE graduates will be at the forefront of that wave.

 

[mzhou]

andy. Thanks for your reply. Your answer is very encouraging. I did hear a lot of rumors regarding FX trader's career will be replaced by computers. In that sense, people with technical background can become hot commodity. With regard to paying due, I did not know that traders need strong programming skills. andy, could you please elaborate a little on that? thanks

 

[Andy Nguyen]

Here is a post I saw online that may be of some help to your question:

well sure, the MSc in FE/OR/CompFin would assist anyone in getting a trader/structuring role. but honestly speaking many of the guys at the larger banks are there because they were at the right place at the right time.

upthread (earlier) someone mentioned a percentage of MFEs who get trader roles. I don't understand why people here can't grasp the fact that the returns to any MSc degree (education) depend on the cumulative work experience of the graduate (prior to.)

Seperately, when you all say "trader" many comments lack further qualification. Are we talking about a equity derivative trader, or are we talking about a structured product trader. I mean, try to envision where you want to work now, because every product, desk, and job is different.

For example, even if you have 2 years experience in "single name" cds at a large bank doesn't mean that after you finish your MSc you will be able to compete for a Traders Assistant role at a abs/cmbs Convertable Arbitrage shoppe. Many new "traders" are hand picked from the ranks of the staff (already working there). So that means as a mfe guy/gal you'd start out as a quant analyst making decent money using the tools, and learning the "game." But assume you'll be inserted directly into the inner sanctum of cash-flow-heaven.

Realistically when/if you are hired anywhere you will be the new guy and there will be a learning curve no matter how much text-book knowledge you know. **Remember** they don't teach you how to run a business in a Financial Engineering program.

 

[alain]

Excellent point Andy.

 

[John]

here's an article that discusses the issue of getting into trading with a Ms Financial Mathematics or Engineering degree:
http://news.efinancialcareers.com/GRADUATE_ITEM/newsItemId-8457

Choices for Financial Math Majors
By Mark Feffer Nov 9 2006

When weighing your credentials in financial mathematics against your career goals in trading, remember that your first job doesn't necessarily define you. You're close to earning your master's degree in financial mathematics, but when you scan the job ads all you see are positions for quants. That's the situation one student found himself in as he scoped out opportunities on Wall Street. He identified many trading desks seeking candidates for roles in logistic or programmatic trading, or for graduates of MBA or Ph.D. programs. "It leaves me wondering," he wrote us, "where do I stand with my qualifications?"
Acknowledging "it's a great question," John Mazzei, managing director at New York-based Rand Thompson, is quick to point out that "there's a distinction between a career goal and a first job." After receiving his master's degree, the first stop for our correspondent will be an entry-level job as a quant or research analyst, he says. It's after he's proved his "reputation and talents" that he'll be able to move to a trader's job - "if that stays his goal." Mazzei notes that during their initial time on the job, the goals of junior staffers often change - as does their employer's view of how to make use of their talents.
Bret Engelkemier, head of U.S. Equity Trading at Citigroup, holds similar views. Trading operations aren't usually looking for one specific talent or background, he says. "We're more worried that you understand advanced algebra, advanced calculus, and the like," he explains. "We'll teach you the other stuff." The level at which firms like Citigroup transact business requires "things you're not going to find out about in a grad school class," Engelkemier points out. What differentiates candidates "is being good, knowing higher-level math, being a great computer programmer," he says. "There's a rapid convergence between traders, quants and technology and the lines are blurring." Also, remember there's more to succeeding in the financial world than math skills. "If he's the brightest person in the world but he can't communicate, it's hard to monetize (his talents)," Engelkemier says. While you're still in school, Mazzei suggests using your alumni group to learn more about the real world. "Contact a graduate from a few years back who's now a trader and find out about their career path," he says.