Nobody seems to escape from the crisis. Pensionfunds are in troubled water, real estate prices drop and the government is the proud owner of banks and industries. Bank employees are struggling to keep their jobs. And the option-traders? Anyone trading for a bank is risking their job, but the pure play market makers should be doing fine unless they are stuck in heavy short vega positions or long dividends. Or short calls on Volkswagen. Turbulence creates opportunity and bonus levels should remain at pre-crisis levels.

Retire at 35

Market makers make a decent living with yearly income a few-fold times the average of their college peers. Nevertheless there are a few shadow sides of the job. Traders can be compared with professional soccer players. Start young, make a truckload of money and retire at the age of, well.. 35. Experience can’t compensate their lack of speed, eager beavers ready to take over. Never met a trader over 40.

Similar to soccer players there’s only very limited management necessary. There’s a coach (manager) for every dozen traders and maybe two more clerks for the risk management. Nobody knows how football players end up in their forties, but apart from the occasional coach they probably spend their days training seven year old kids on the pitch. No such opportunity for traders.

Wasted for society

Former traders are wasted for the society. A serious job in hierarchical organizations, making long hours without any serious bonus incentive doesn’t match the profile of the former derivative trader. Apart from that, who needs thorough knowledge of volatility smiles, straddle swaps and jellyrolls? With this lack of a promising career path it makes sense both football players and traders make at least threefold the normal post-university salary. They have to earn their pension money in only a third of the usual career timespan.

Jack
Jack