Making the Transition from Support Group to Trading Desk

Preparing for a trading interview (described here) is a like cramming for an exam, a short period of intense preparation followed by a draining day-long session that demands total focus and maximum effort. Sadly, most candidates will fail this test. It need not be the end of the road, however. Applicants passed over for trading opportunities can often get a second bite at the apple by joining a trading firm in a support capacity, then seeking to move onto the desk. Making the transition to a trading seat from a support role will take preparation, a plan, and a significant amount of discipline and endurance, and the relative success or failure of the effort will often hinge on the individual’s interpersonal skills as much as their technical knowledge.


Newly-hired support staff will be slotted into the firm in either a front office, middle office, or back office role. The front office is the commercial function of the firm, encompassing the trading and origination desks and personnel that work closely with them, including dedicated on-desk analysts, members of the structuring group, and senior fundamental and quantitative analysts. Middle office functions include the risk group (though it is technically outside of the trading reporting chain), the portion of the analytics groups that does not report directly to trading, and the operations group that handles the scheduling and delivery of physical transactions. The back office handles purely administrative functions, and is composed of the credit group, the legal group, the contract administrators, and the compliance group. The closer to the desk the aspiring trader starts, the better.


Support staff should expect to receive little help in their progress toward the desk from their current management, as the heads of support functions are concerned with maintaining a smoothly operating group, not serving as a training ground for another business unit or facilitating the aspirations of their employees. It will be necessary for the aspiring trader to carve out some portion of their day to work on building relationships with the members of the trading desk and acquiring the skills and market knowledge necessary to progress, which in practice may mean coming in early and/or staying late to actually complete their assigned work.


It is critical for support staff to understand that the onus will be on them to drive the process. As seem in this excerpt from Trader Construction Kit:


“There is one huge misconception that prevents people from being hired onto a trading desk from some other area of the company: aspirants believe that some innate quality of theirs will shine through as they toil away on the cover sheets for their TPS reports, that senior management will somehow identify it through unspecified means and, in a stirring act of trust and belief, whisk the employee off into a fairytale world of four-screen desks, turret phones, and lavish compensation. It does not work like that. Anyone seeking to escape support-staff hell will have to do the following:

  1. Make the management of the trading desk aware that he really wants to be a trader and would strongly consider anything up to and including murder as a means of career advancement.
  2. Make sure he understands the requirements of the position he is seeking, and show that he is attempting to evolve in that direction, to the maximum extent possible. This is the crux of the matter. Nobody cares how good of a confirmations analyst or accounts payable coordinator the anonymous drone from down the hall is; it has no bearing on their capability to fill a trading seat.
  3. Be engaged in the firm’s business, show interest, initiative, and make the most of any opportunity. It is difficult for a person in a support function to be current on the market, but he can at least know which markets the firm participates in, etc.”


The goal is to be seen as the first in line for the next trading vacancy by the trading desk. Support functions are powerless to push an analyst or risk manager onto the trading desk. Senior management of the firm can facilitate a move, but are generally loathe to anger the producers by shoving someone into the group that they may not want. The desk has to feel the candidate is a good fit and can add value to consider bringing them on, otherwise they will go to the external market. Every internal candidate will be competing against the universe of potential external hires on the basis of being a (probably) cheaper known quantity with upside potential. If the desk does not know the candidate and believe that they have something to offer and room to grow, they will hire from outside the firm.


There are potential downsides to being on what amounts to a multi-year job interview. Familiarity breeds contempt, which cuts both ways. The day-to-day interaction with the trading desk gives the traders the opportunity to form opinions about the analysts, etc. There is a need for the support staff member to guard and curate their professional image over an extended period of time, which can be challenging. Being on point for eight hours of interviews is hard, maintaining that level of focus for eighteen months is extremely stressful. Worse yet, seventeen months and twenty nine days of focus, dedication and unwavering competency can be completely undone by one bad day, blown presentation, stupid argument, or regrettable social interaction. It can be difficult for support staff to understand (or stomach) that there are two sets of rules, one for the trading desk and one for everyone else. Profitable traders are often granted an almost incomprehensible degree of behavioral latitude, frequently going unpunished for actions that would mean discipline or dismissal for an employee that wasn’t currently up $50M for the year. It’s not right, and it’s not particularly fair, but it does happen.


One of the biggest (and most inexplicable) mistakes support staff make is to loudly, publically assert that they should have a trading job because they are smarter, have more latent talent, or have a more advanced degree than the people currently on the desk. It normal for nascent markets to reward different behaviors and skill sets than developed markets require, and each successive generation of analysts and traders will invariably be better educated and start from a higher informational baseline than their predecessors, sometimes to a ridiculous extent. This can be extremely frustrating for newly-minted PhDs expected to take orders (and abuse) from a comparative Cro-Magnon with a low-rent bachelors degree who lucked into the last good trading job right before the market evolved. Highly educated newcomers would do well to remember that every successful trader has developed (or assimilated) an experientially-based body of knowledge and technique for operating in the market, one that they will need to master to take their place on the desk. Alienating the only source of information is a very, very bad idea.


Support staff need to be aware of, and take maximum advantage of, their opportunities to interact with the trading desk and learn the firm’s business. If a senior trader offers to explain something about the market, make time to listen. If the head of analytics offers research that informs the traders’ decisions, be sure to read it. If there is a mentoring program, join and take full advantage of it. If there is internal training, sign up for it. Do not squander opportunities. Help that is refused and resources not taken advantage of will not be re-offered, and members of the trading desk will definitely remember analysts who bemoan their lack of advancement but were “too busy” to sit on the desk, go to a class, or read a research report.


In addition to the market and product-specific knowledge that support staff will have to assimilate by osmosis from the traders and on-desk analysts there will be a great deal of basic information that they will have to master. A list of resources (Trader Construction Kit among them) can be found here.


An aspiring trader temporarily trapped in support-staff purgatory should use their newfound perspective to honestly re-assess themselves relative to the demands of the job in general and the particular way it is practiced at their firm. As the saying goes: Everybody likes sausage, until they see how it is made. Seeing firsthand what the job entails and the demands it makes of its practitioners has led many aspirants to realize that it really isn’t for them, after all. Figuring that out before making a committing move to the desk is a mature, sensible decision. A productive career as a risk manager or analyst at a successful firm will frequently be significantly more lucrative, in the long run, than an unsuccessful stint on a trading desk followed by a swift termination.


In summary, support staff must do the following to transition to the trading desk: 

  1. Take responsibility and drive the process, to the maximum extent possible, as their current job will typically not have an established evolutionary path to the trading desk.
  2. Understand that there will be a substantial amount of self-education, both in terms of specific markets and products and general trading information.
  3. Immerse themselves in the culture of the firm and the trading desk, in particular.
  4. Take advantage of every opportunity to work with and learn from members of the trading desk, both to develop knowledge and to build relationships.
  5. Be professional and learn to deal with adversity instead of becoming frustrated and giving up, lashing out, or finding any one of a hundred ways to self-sabotage their progress toward their goal.


Aspiring traders must dedicate themselves to the process, work to increase their knowledge base, and take advantage of every opportunity to make the small, incremental steps that will ultimately lead to their jump to the trading desk.




Excerpt from Trader Construction Kit Copyright © 2016 Joel Rubano. All rights reserved. No part may be reproduced in any form or by any electronic or mechanical means, including information storage and retrieval systems, without permission in writing from the publisher, except by reviewers, who may quote brief passages in a review.