One of my former colleagues in the City had a robust response for anyone who queried why people in the financial services sector made so much money. "It's because", he would say, "they have to work in our business".
Last evening the BBC showed the first episode of "Million Dollar Traders", a brief reality-type series that may enlighten a few people about what he meant by that. A hedge-fund manager, Lex van Dam, hired a group of eight complete novices, gave them a couple of weeks' training, and then set them to work in the equity markets, running a tiny (£1 million) fund that van Dam had set up. By coincidence, albeit a good one for the producers, the global markets slumped in the team's first week of trading.
Just in the first episode, we've seen some of the things that make working in the City so stressful. The early starts -- one of the participants was shown on the platform of his local station at 5:24 am, reading the FT. The relentless pressure -- one man's trade went wrong because he was still having breakfast at the time the markets opened. The unpredictability of the markets themselves -- one guy put on a carefully thought out trade with a hedge to prevent losses, only to see both sides of the deal lose him money. We haven't seen any of the more serious ructions that are common in dealing rooms yet -- screaming matches across the dealing floor, people barricading themselves in the bogs, fights, phones used to demolish computer screens -- but there are still two more episodes for that to happen.
And these folks are only playing for retail stakes -- no positions larger than £5000 at this stage -- and know they only have to do it for a few weeks. The stresses for those playing for real money, and with their careers on the line, are massively multiplied. So next time you see a bunch of traders piling into Stringfellow's, try to understand that they have a lot of stress to work off. And watch "Million Dollar Traders" -- it's a reality show that can actually teach you something.
No comments:
Post a Comment