million dollar traders

[fractionMan]

Trading and poker have a lot in common. For starters they're both called gambling by those who don't understand them.

If you're good then you'll make money in the long run, because you have an edge (however slight) over those that are worse at it than you are. In the end you're playing against other people and other people will hopefully make more mistakes than you do.

 

[hammerntongues]

Then you're living in denial. Sorry, but even when you're winning, even consistently, it's still gambling because there is a risk you won't, no matter how much you try and remove it. Your basic psychology - because I consistently win I'm beating the odds, therefore it's no longer gambling - is bad, and makes people take bad risks. As we've seen over the last 24 months, when the whole banking industry thought that CDOs and derivatives were something that you could never lose money on.

No trader would have ever claimed that you couldn`t lose money trading derivatives , the whole trade is built around risk .
The fact that the market had only gone one way for many years just gave them false comfort , it became too easy , they chose to ignore the risk.
Human nature is the downfall , greed.

I would still maintain that the professional gambler or trader who knows his market is sure of his information and is aware of the risk/reward can , and does , make money over the long term. There will be lumps and bumps along the way no denying.

 

[Stoat Boy]

The only way to make any real sort of money out of stocks and shares is to either take a long term approach of buying based on quality of product/services being offered backed up by assets or else short term on 'unique information' i.e insider knowledge.

Otherwise its just gambling, at least in my not so humble and you might as well throw darts to pick you buys and sells.

 

[greedy banker]

What a bunch of muppets, hehe... we need to see them let lose on something decently leveraged prop house styleee, half a million should be good for a few hundred bunds. See some proper break downs, none of this faffing around for a couple of hundered quid or celebrating winning £2 when a stock drops a penny (wtf )

p.s.

Blade,

I know your screename from somewhere red all over

 

[Mr Retro]

I enjoyed the show and I'd love to have a go for a few weeks with Lex Luthers money, but imagine doing it full time?

I don't care how much money you make nothing would pay me for the stress of a job like that. Their manager looks like he's been subject to Clockwork Orange type abuse.

Retired at 27, a millionaire with a 1,000 yard stare

 

[Diamond]

I caught up with the first episode of this on iplayer last night. It was great. What a crazy profession. The level of intensity that those traders need is just incredible and it's so clear that most of the noobs are nowhere near that standard right now.

I liked the description of a trading mindset that (IIRC) Van Dam's lieutant gave, which boiled down to thinking in clear, discrete moments in time while also being aware of the greater framework in which that occurs. Totally counter-intuitive and preferably devoid of emotion. You can see why there's supposed to be so many psychopaths in these kind of operations.

 

[greedy banker]

intense.... nah, spent most of day surfing redtube. MLK day, don'tchaknow?

you ain't seen intense yet.

 

[Gromit]

I'm watching this with much curiosity. That woman who won't invest. Watching the fear and how despite being told time and time again invest she still won't. ITs almost like telling someone eat something or starve and still they starve for fear of eating something that may taste unpleasant or taste great but afraid to find out.

 

[Dowie]

Tbh many things didn't seem right about it eg they were using bloomberg altho they were trading equities, orders were phoned thru rather than electronically traded, the boss man was wingeing about being £2.5k down on a £500,000 portfolio, that guys idea about going long HBOS and shorting AIB was clearly a crap idea, there's no fututres trading etc etc etc.

Having said that, the emotions they all clearly felt were very very real.

Yes but its a TV program!!!

If they stuck them in front of some TT screens and said go punt the bund for a bit we'd just be watching them all sat in silence clicking away - not a very exciting way to fill 3 hours.

Leave them with a whole bunch of cash equities to choose from and trade as they please and it gets more interesting.

Get some voice broker like ICAP or whoever Mr van Dam pulled a favour from involved and the production team has some sound bites to play with.

Added to that I'm pretty sure the guy managing them could monitor the positions perfectly well from his monitor - having them punch little bits of paper then go and tell him what position they've just opened/closed & why keeps it interesting.

 

[Dowie]

Not being funny, but 'trading' and 'gambling' are exactly the same thing - the only difference is the amount of bullshit that the former has and the latter generally doesn't. Sat there reading a company report and looking at a graph of their share price and reading a horses form in the Racing Post are the same activity.

True

In fact you've probably got a much better chance of finding an exploitable edge/inefficiency within a sports market then the mug punters who get spanked by spread betting firms when trying to bet on highly liquid financial markets.

Bookies by the way always make money , they don`t gamble . Traders ,if you follow your assumptions , would be likened to punters not bookies.

Not always true.

A market maker is a trader and probably more like a bookie than a punter - also like a (UK) bookie they do take on risk and certainly don't always make money.

In a tote/parimutuel system the bookie could perhaps be compared to a broker in so much as he isn't acting as a counterparty and isn't taking on any risk from your bet.

A bookie offering fixed odds is taking on risk and won't always make money.

 

[greedy banker]

If they stuck them in front of some TT screens and said go punt the bund for a bit we'd just be watching them all sat in silence clicking away - not a very exciting way to fill 3 hours.

Ah comeon we wouldn't be seeing them click away in silence, we'd be seeing them rolling on the floor screaming for mercy; imagine them over that emergency rate cut. "eeaeeahahahghhghghghg I'm a hundred ticks offside and Eurex is down" CRY BITCH CRY. Let them lose over NFP for added lulz. Watch the old git fade an 'overreaction'. FEEL THE PAIN DIE DIE DIE

Or even the gilt this morning and yesterday (I see Jim Rogers has been reading my U75 post on gilts).

And then they can meet my good friend Mr. Rotter... hehe

 

[hammerntongues]

True

In fact you've probably got a much better chance of finding an exploitable edge/inefficiency within a sports market then the mug punters who get spanked by spread betting firms when trying to bet on highly liquid financial markets.



Not always true.

A market maker is a trader and probably more like a bookie than a punter - also like a (UK) bookie they do take on risk and certainly don't always make money.

In a tote/parimutuel system the bookie could perhaps be compared to a broker in so much as he isn't acting as a counterparty and isn't taking on any risk from your bet.

A bookie offering fixed odds is taking on risk and won't always make money.

Long - term , it`s all about long -term , of course bookies don`t always make money or the punters would never come back , in the long-term however they will always make money , bookies do not gamble , they balance their book to ensure that they will always have the edge, barring short term idiosyncracies it will come back to them in the end.

The comparison with poker players is far more appropriate than with gamblers , the longer the better players play the more they are likely to come out on top.

As someone once said " The harder you work , the luckier you get "

 

[gnoriac]

I'm watching this with much curiosity. That woman who won't invest. Watching the fear and how despite being told time and time again invest she still won't. ITs almost like telling someone eat something or starve and still they starve for fear of eating something that may taste unpleasant or taste great but afraid to find out.

Struck me that if she has thought-out strategies but won't go with them because the prices won't drop right, it means her strategies are inherently duff.

 

[hammerntongues]

Struck me that if she has thought-out strategies but won't go with them because the prices won't drop right, it means her strategies are inherently duff.

To an extent but there are times when it is right not to trade , it depends if she is just indecisive , which is what it looks like , or just waiting for the right opportunity to fall . Her inaction has left her in a better postion than some of the others , particarly the old fella who was just taking wild punts . I have a feeling that she is going to come good , it would just make better TV.

 

[Gromit]

I've a feeling that in the real world they would bin her for not being trader material.

Yes the Market is shit and it's not a good time to invest but they don't pack up the stock exchange because of it. Everyone carries on trading as that's the business they are in. Uninvested money might just as well otherwise just sit in an savings account earning rubbish interest. Not the message the city wants to spread.

 

[A Dashing Blade]

Struck me that if she has thought-out strategies but won't go with them because the prices won't drop right, it means her strategies are inherently duff.

Nope, looks to me like she has a psychological inability to pull the trigger, "rabbit in the headlights" syndrome.

 

[Dowie]

Long - term , it`s all about long -term , of course bookies don`t always make money or the punters would never come back , in the long-term however they will always make money , bookies do not gamble , they balance their book to ensure that they will always have the edge, barring short term idiosyncracies it will come back to them in the end.

The comparison with poker players is far more appropriate than with gamblers , the longer the better players play the more they are likely to come out on top.

As someone once said " The harder you work , the luckier you get "

I don't think you understood my point before, if they're offering fixed odds then then are accepting risks or "gambling" and they can lose. A big highstreet bookie is well capitalised and isn't likely to go under just as a big market maker can take a few losses. Buy do you honestly believe that no track side bookie has ever had to start running from a race course or that they always have their books balanced? To say that bookies always make money is complete nonsense.

 

[Dowie]

Let them lose over NFP for added lulz. Watch the old git fade an 'overreaction'. FEEL THE PAIN DIE DIE DIE

They showed a clip of them watching the screens over NFP - I'm guessing they were under instructions not to phone up and place any orders.

 

[hammerntongues]

I don't think you understood my point before, if they're offering fixed odds then then are accepting risks or "gambling" and they can lose. A big highstreet bookie is well capitalised and isn't likely to go under just as a big market maker can take a few losses. Buy do you honestly believe that no track side bookie has ever had to start running from a race course or that they always have their books balanced? To say that bookies always make money is complete nonsense.

Accepting risk is not neccessarily gambling .

we seem to be getting of the point a bit , as I said i don`t equate bookmakers to traders which is what this thread is about but there are certainly similarities , hedging your postion is the same as " Laying Off " in bookie speak , if an unprecedented amount of money comes in for a particular outcome of a race , bookie will just take some of the wager and place a similar bet with the competion , or he will lengthen the " field " to generate more money wagered on other outcomes .
Just like traders some will expose themselves to more risk than others ,but a well capitilised professionally run bookmaker will not lose money in the long term.

 

[pboi]

pipe down scouse. Lex is my hero

 

[Gromit]

Hmm so none of them went on to become traders.
Fair enough the one wanted to finish his degree but the other two?

 

[hektik]

Hmm so none of them went on to become traders.
Fair enough the one wanted to finish his degree but the other two?

probably a bit too difficult in the current climate: too many other traders with more experience on the job market too.

edited to add: good end to this series: although I still can't work out why that scouse lad left when the girl got sacked (other than fancying her, obviously) - he didn't make such a song and dance out of the old fella leaving last week, so why did he get the hump this time.

I thought he came across a bit mawkish (to borrow boris's description of scousers) - just because she was crying, he decided she had been ill-treated and decided to leave as well. Would he have done the same in a "normal" job (ie not one he was only doing for 6 weeks, but one he had to stay with in order to pay the bills). I doubt it.

I also liked the soldier guy on the phone: "hey carl, does your phone do this" Mega fun. think i'll do that to someone this week.

 

[pboi]

Hmm so none of them went on to become traders.
Fair enough the one wanted to finish his degree but the other two?

dont think that was the point of the program. they wouldnt walk into real jobs..the requirements in the real world take time, drive, committment, intelligence and luck plus a dash of arrogance and people skills

 

[greedy banker]

Accepting risk is not neccessarily gambling .

we seem to be getting of the point a bit , as I said i don`t equate bookmakers to traders which is what this thread is about but there are certainly similarities , hedging your postion is the same as " Laying Off " in bookie speak , if an unprecedented amount of money comes in for a particular outcome of a race , bookie will just take some of the wager and place a similar bet with the competion , or he will lengthen the " field " to generate more money wagered on other outcomes .
Just like traders some will expose themselves to more risk than others ,but a well capitilised professionally run bookmaker will not lose money in the long term.

Except, of course, a trader cannot guarantee their risk is hedged (even when all they're doing is writing a vanilla option) unless you assume a perfectly liquid and continuous market open 24/7 with no transaction costs. And most stuff is OTC and anything but vanilla these days, so a lot of it is on hope really, unless of course one is as clever as me

 

[hammerntongues]

Except, of course, a trader cannot guarantee their risk is hedged (even when all they're doing is writing a vanilla option) unless you assume a perfectly liquid and continuous market open 24/7 with no transaction costs. And most stuff is OTC and anything but vanilla these days, so a lot of it is on hope really, unless of course one is as clever as me

I`ve been guessing well for the last 25 years

 

[greedy banker]

Sure, but take a look at old vol smiles (or practical lack of them) before the 87 crash... taht wasn't 25 years but it was more than 10

 

[bouncer_the_dog]

it is amazing what arseholes the people in that business are..

 

[D'wards]

I think they are proud of their arseholeness - that Lex Van Dam nob was far more interested in pushing the ruthless businessman "lunch is for wimps" cliche than nurtering the traders

 

[onemonkey]

I used to market make on the LIFFE floor and worked a few fx and equity derivatives desks since then.. I always considered it a casino..

I'd agree that to a reasonable approximation

market makers are bookies..
prop traders are punters (usually punting large amounts of other people's money)

all other things being equal the quant models were correct but of course not all other things were equal. So your equity derivatives model from 10 Sep 2001 didn't help you much the following week.