I just handed in my manuscript for One Good Trade to Wiley. I am relieved to have this behind me. During my editing process I discarded some humorous anecdotes that just did not quite fit with my book. I thought you might enjoy this one interview I had with a prospective prop trader candidate.
GOP: Be Respectful
This next interview occurred on a Friday. By the end of the week if I can keep my eyes open past 9pm this is a huge victory. And it’s 7pm and I am at the office. I am hungry. I really just want to go home, lie on my couch, order a pizza, and watch the Yankees. But we are a little behind with our interviews and there is an excellent candidate to be interviewed. This candidate had traded at a big bank. His resume claims he made five million for his bank last year. He was a former college athlete. Let’s call him GOP (Good On Paper).
Sometimes when I am tired I start the recruiting process backwards. I let the candidate lead with questions. GOP started with, “How much does the average trader make when he starts?” Already he’s compounding my Friday evening angst. He then asked, “Do you hold overnights?” I explained that we don’t and that when we first traded we did.
For background, I first started during the tech boom. We traded AMAT, KLAC, CSCO, INTC, MSFT, DELL, NVLS. Stocks that printed strongly into the Close (stocks that finished at their intraday highs) tended to gap up the next morning. So we would take them out overnight. During the Internet boom we did this as well. After the Internet bubble burst we stopped this practice, as the patterns dissipated and the risk/reward fell out of favor. Maybe these patterns will emerge again. But today the strongest stocks into the Close can open negative, and the weakest stocks can gap up on the Open. Those old school patterns are gone the way of Urban Fetch, a NYC delivery service infamous for delivering indulgent snacks like Krispy Kreme and Ben and Jerry’s ice cream before bed. Further there is so much overnight risk presently that it is not worth it for us. This might work at other places, just not for us, and not during this market, as you never know when a bailout will fall from the sky.
GOP listened and responded, “Well, that is a mistake. I would not trade anywhere that did not allow overnights.” I remarked then I guess we weren’t a good fit for him and apologized for wasting his time. I could taste the Patsy’s pizza as I finished this sentence. And just when you would have thought the interview had ended, the fun started.
“I made five million dollars for my firm last year,” GOP said. “I made it taking out positions. How much did you make last year?”
“Less than that,” I remarked.
“Then doesn’t that show that it would be stupid not to allow me to take overnights?” he responded arrogantly.
“Not necessarily,” I replied calmly. “We trade a certain style. There are certainly many different ways to make money. We are looking for those who are a good fit for us. We would not during this market be able to quantify our risk with your overnights.”
“How much did you make last year?” he asked again with disrespect. And the back and forth continued without progress.
“Less than you apparently.”
“Well, I am not interested in this firm unless I can take out overnights.”
“Understood. I guess we’re not a good fit for you.”
“So you are not going to let me take out overnights?”
“No,” I said.
“Well, that is so stupid.”
“Look, I am tired, it’s been a long week, SMB is not a good fit for you.”
“So you are asking me to leave?” GOP asked annoyed.
“I cannot help you. We are not a good fit for you,” I replied patiently.
“That is rude. You are kicking me out of your office?” he asked raising his voice.
“I cannot help you. We are not a good fit for you,” I replied soothingly and even more patiently.
“Thanks for wasting my time,” GOP barked.
“I am sorry. Best of luck with your search.”
“This is so stupid.”
“Enjoy your weekend.”
Sometimes people like GOP are just having a bad day. Sometimes good traders are not used to civility. They are like pampered athletes who if producing can get away with just about anything. We are not really interested in people with such an attitude. Eventually they end up bringing down morale, which is expensive. I would assume this is why Dallas Cowboys owner Jerry Jones released Terrell Owens. But also I do not want to spend the entire day around those who I do not respect.
Arguing with a partner is not the best way to secure an invitation with a firm. Managing our risk is very important. If we cannot quantify our risk then we cannot allow our traders to make certain trades. Two more things: 1) The trader above made less than seven percent of what he made for the firm because of losses in other departments. 2) The bank where GOP traded is no longer in business.
22 Comments on “Good on Paper (GOP): Be Respectful”
That IS a good one!
This also bring about an interesting conundrum. Is trading the best profession for people that severely lack common sense?
On a second thought, it’s only second to being a government employee.
Thanks for sharing!
That IS a good one!
This also bring about an interesting conundrum. Is trading the best profession for people that severely lack common sense?
On a second thought, it’s only second to being a government employee.
Thanks for sharing!
That IS a good one!
This also bring about an interesting conundrum. Is trading the best profession for people that severely lack common sense?
On a second thought, it’s only second to being a government employee.
Thanks for sharing!
Nice…When will the book be out?
Nice…When will the book be out?
Really looking forward to the book .. good show on seeing it through to completion. Potential is utterly useless without action 😉
On the other front …
Your shop has one of the most public profiles in the trading community. You folks actually train on a methodolgy rather than just renting screen space and a lan connection to exchange: In other words, a real prop shop.
Anyone who has more than 3 months of screen time and has followed your posts knows SMB is the real deal.
Conundrum: How is it that a yank like this could even make it in the door? Did you have the “once over” conversation with the recruiter after he left?
I’ve seen the same thing in the IT community for years — lot of resume’ fodder, but a complete lack of horse sense for real world situational scenarios. However, we’ve filtered a lot of these folks on the phone before the “face to face”.
Back in 85′ Stanford accepted about 1,200 for the Freshman class and had around 9000 applicants (3500 had 4.0 averages). I don’t know what the stats are today, but I can only imagine you’re a lot more selective than Stanford and that interlude was a singular mismatch of time and energy.
Be cool, Bella … you’re a soulful guy to put up with that nonsense.
Mark S.
Really looking forward to the book .. good show on seeing it through to completion. Potential is utterly useless without action 😉
On the other front …
Your shop has one of the most public profiles in the trading community. You folks actually train on a methodolgy rather than just renting screen space and a lan connection to exchange: In other words, a real prop shop.
Anyone who has more than 3 months of screen time and has followed your posts knows SMB is the real deal.
Conundrum: How is it that a yank like this could even make it in the door? Did you have the “once over” conversation with the recruiter after he left?
I’ve seen the same thing in the IT community for years — lot of resume’ fodder, but a complete lack of horse sense for real world situational scenarios. However, we’ve filtered a lot of these folks on the phone before the “face to face”.
Back in 85′ Stanford accepted about 1,200 for the Freshman class and had around 9000 applicants (3500 had 4.0 averages). I don’t know what the stats are today, but I can only imagine you’re a lot more selective than Stanford and that interlude was a singular mismatch of time and energy.
Be cool, Bella … you’re a soulful guy to put up with that nonsense.
Mark S.
Hey Bella,
i used to take overnites too back when i stared 99/98- until i lost almost the entire yrs profits holding into an earnings play…. in @3:59 toast by 4:05. Looking forward to your book ,When will it be available ? thnx Tom
Hey Bella,
i used to take overnites too back when i stared 99/98- until i lost almost the entire yrs profits holding into an earnings play…. in @3:59 toast by 4:05. Looking forward to your book ,When will it be available ? thnx Tom
Hey Bella,
i used to take overnites too back when i stared 99/98- until i lost almost the entire yrs profits holding into an earnings play…. in @3:59 toast by 4:05. Looking forward to your book ,When will it be available ? thnx Tom
The applicant’s emotional intelligence quotient seems to be really low. Congratulations you were able to determine that in the interview and saved yourself a lot of bother later!
The applicant’s emotional intelligence quotient seems to be really low. Congratulations you were able to determine that in the interview and saved yourself a lot of bother later!
I trade FX and my best rolls happen overnights, but I can quantify all that because its a continous market. This guy sounds like he fits the stereotype of an NYC trader and reminds me why I choose to engage this business offshore.
That said, I do believe the really big money is in position trading.
I trade FX and my best rolls happen overnights, but I can quantify all that because its a continous market. This guy sounds like he fits the stereotype of an NYC trader and reminds me why I choose to engage this business offshore.
That said, I do believe the really big money is in position trading.
I trade FX and my best rolls happen overnights, but I can quantify all that because its a continous market. This guy sounds like he fits the stereotype of an NYC trader and reminds me why I choose to engage this business offshore.
That said, I do believe the really big money is in position trading.
Good post about the arrogance of some traders and how narrow minded some can be. Regarding overnights, you are totally right in the unlimited risk. The only way I would play an overnight trade is with an option buy so you limit your risk.
Good post about the arrogance of some traders and how narrow minded some can be. Regarding overnights, you are totally right in the unlimited risk. The only way I would play an overnight trade is with an option buy so you limit your risk.
Bella, I wonder did he explain the complete details, that when his position was out of the money that instead of unwinding his position they trimmed it in small increments, costing the now failed bank until he made his millions. My opinion most good tape readers are Simon-pure tape readers and leave nothing to chance with over night position. Also, look forward to the new book.
Bella, I wonder did he explain the complete details, that when his position was out of the money that instead of unwinding his position they trimmed it in small increments, costing the now failed bank until he made his millions. My opinion most good tape readers are Simon-pure tape readers and leave nothing to chance with over night position. Also, look forward to the new book.
this is a great blog post… thanks for the story…
hey can we get a table of contents for your book posted on the blog.. thanks..
this is a great blog post… thanks for the story…
hey can we get a table of contents for your book posted on the blog.. thanks..
Trader,
Great idea to post the Table of Contents. When the book is locked I will offer that.
Bella