Jaime Swartz... find out more about

When you start off as a trader, there is a long period of on the job training. At Jaime’s firm, once they start trading, traders often rotate between different products, which means that you might trade oil for a while (which Jaime does right now), then move to trade options on the S&P 500. Trading used to primarily be open outcry- that is, people who stood in trading pits shouting and using hand signals all day long, as seen in the movies. (Ferris Bueller comes to mind.) Today, some trading still happens in the pits, but more and more is done electronically.

How you get started as a trader

For full-time new hires, they start as trader trainees. During the day, they are mostly doing clerking responsibilities, but we have automated a substantial part of our clerking. It’s more problem solving about why things don’t match if they don’t match and understanding. During the day, they go through the core theory program. They go through mock trading. Core theory only takes three months, and then mock trading usually takes nine months to a year.

If they interned or they’re very good and catch onto mock trading quickly, they can get through it sooner. Then they will go into a junior trading role. We don’t really use titles for the trading roles.

Junior traders have some limited amount of training responsibility that’s very supervised. We introduce them to our electronic trading systems. We give them a crash course in that. They shadow people. They observe, and then they get thrown into the fire a little bit in a way where they cannot have a catastrophe.

What happens when you’ve got some experience

They do that for a while, and then become mid-level traders. Most of them are electronic traders here. There are some people we send down to the trading floor. I was one of the people that was on the trading floor. There are people who have that personality: social, outgoing, can communicate face to face very well, can execute trades face to face very well, can be blunt, and thick-skinned. The mid-level traders go into those spots.

Trader trainee is nine months to a year. I would say junior trader is a year. By the time you’re two years in, you’ve got the experience under your belt to be what I would consider a mid-level trader for most people for another year or two, and then, by that point, we make a distinction. Which people are potential candidates to be volatility managers, basically a risk manager for a trading desk? Not everyone is cut out for that, but there are a lot of people being identified very early as strong candidates.

Some of it is the financial risk management part of it, and some of it is the people management, depending how big the team is. The S&P 500 desk has 15 traders on it, and it’s expanding. Whoever runs that has to be a very good people manager, very good at delegating tasks, and making people in charge of different things, and making everyone feel like they have a very significant impact and role. I ran the Russell and NASDAQ trading desk for a year, and I had one trader with me.