Traders consider themselves smarter than the salespeople, who they believe don’t understand the products they sell, and bankers, who they believe are slaves with no lives whatsoever. Traders take pride in having free weekends and the option of leaving early on a Friday afternoon. Typically, a trader's day tracks closely to those of the market, and includes an additional two or more hours. Mornings start usually between 6:00 a.m. to 7:00 a.m., and the day ends shortly after the market close.
Traders typically start the day by checking news, reviewing markets that trade overnight (i.e. Asian markets), and examining their inventory. At 7:30, the "morning meeting" is held to cover a multitude of issues.
Every morning of every trading day, each I-banking firm (both on and off Wall Street) holds a morning meeting. What happens at these meetings? Besides coffee all around and a few yawns, morning meetings generally are a way to brief sales, trading and research on market activity - past and expected.
At smaller regional firms, the entire equity group usually meets: the salesforce, traders, and research analysts.
The bigger firms, because of their sheer size, wire speakers to an overhead speaking system, which is broadcast to the entire equity trading floor. Institutional salespeople and brokers outside the home office also call in to listen in on the meeting.
In fixed income, meetings are broken down by groups. For example, the government desk, trade mortgage desk, the emerging markets desk, and the high-yield desk will each have their own morning meetings with the relevant traders, salespeople and research analysts present.
Coverage reports command the most attention to both traders and salespeople on the equity side. In fixed income, meetings will often have analysts who cover economic issues discuss interest rates, Fed activity or market issues, as these often dominate activity in the debt markets.
- Traders cover their inventory, mainly for the benefit of salespeople and brokers in the field. Sometimes a trader eager to "move" some stock or bonds he or she has carried on the books too long will give quick selling points and indicate where he or she is willing to sell the securities.
- Salespeople, including both brokers and institutional sales, primarily listen and ask relevant questions to the research analyst or to traders, sometimes chipping in with additional information about news or market data.
Corporate finance professionals rarely attend morning meetings, choosing instead to show up for work around 9 or 10 a.m.
After the morning meeting, between 8:00 and 8:15, the traders begin to gear up for the market opening. Sales-traders begin to make calls to clients, soliciting trades before the market opens. At 8:30 a.m., the tune begins in many fixed income markets - calls begin pouring in and trades start flying. At 9:30 Eastern Time, the stock markets open and a flurry of activity immediately ensues.
The day continues with a barrage of market news from the outside, rating changes from research analysts and phone calls from clients. The first breather does not come until lunchtime, when traders take five to grab a sandwich and relax for a few brief minutes. However, the market does not close at lunch, and if a trade is in progress, the traders go without their meals or with meals swallowed amidst the frenzy.
The action heats up again after lunchtime and continues as before. At 4:00 p.m., the stock markets officially close and wrap-up begins. Some traders vanish exactly at 4, rushing out in a hurry. Most traders tend to leave around 5 p.m. after closing the books for the day and tying up loose ends.
On Fridays, most trading floors are completely empty by 5. For salespeople and traders, golf games, trips to the bar and other social activities are not usually hampered by Friday evenings and nights spent at work.
Success Factors In Trading
There are many keys to success in trading. On the fixed income side, numbers and quantitative skills are especially important, but truly are a prerequisite to survival more than a factor to success. In equities, traders must not only juggle the numbers, but also understand what drives stock prices. These factors include earnings, management assessments, how news affects stocks, etc.
To be one of the best traders, an instinct about the market is key. Some traders look at technical indicators and numbers until they are blue in the face, but without a gut feel on how the market moves, they will never rank among the best. A trader must make rapid decisions at times with little information to go on, and so must be able to quickly assess investor sentiment, market dynamics and the ins and outs of the securities they are trading.
