If you want to have successful career in the investment bank you have to carefully tailor your education to your goals. Some degrees/certificates may be useful in certain division and completely useless in different ones. Below, I created a list of the certificates/degrees that are most useful in various IBank divisions. [You can find detailed information about various certificates under: examhub.org]. Of course the list is subjective - if you have suggestions please let me know.
Investment Banking Division: MBA should be considered as a top choice for all who target this division. IBD is mainly about general business knowledge, and MBA is great for that. I've heard about some IBD people with CFA, as CFA is quite prestige designation, and you need prestige if you are willing to work in IBD.
Sales: No specific degree or certificate is required. What counts most is your energy and ability to talk with people. MBA may be quite good for this division anyways (as MBA is about networking, and in Sales you may use your network/contact to market the products). In Hedge Fund sales CAIA degree may be desirable.
Flow Trading: Most useful certificates for flow trading are ACI (ACI Association) or FSA certificates. This certificates are focused on very specialized knowledge (how to make deals in the market, how to book the deals etc)
Prop Trading: Prop trading (including Stat Arb.) is nowadays very quantitative discipline. PhD in highly quantitative discipline (physics, economics etc) is preferred, but in this business there are many people, who are self made men - without special degree etc.
Research: In economics research EconPhD is extremely useful. In equity research CFA is a good choice (better than PhD)
Wealth Management: CFA or MBA are very useful
Risk Management: FRM or PRM are good choices. PhD may be useful as well.
Sunday, August 26, 2007
Which degree/certificate for specific division in Investment Bank?
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5 comments:
What about CAIA? Wouldn't that be beneficial for Prop Trading?
CAIA is good if you want to work in Fund of Funds. CAIA will provide you with some technical stuff that is useful.
However, CAIA is NOT useful in Prop Trading. In prop trading your intelectual abilities count most. There is no school in which you can learn how to trade (not mentioning turtles group). Everyone needs to learn by himself how to beat the market.
Best, PhD Student
The turtle rules (found here: http://freeforexebooks.com/Other/turtlerules.pdf)
don't work as far as I know. I tried to create an automated trading system that followed those rules, their calculation of the variable N was a bit fuzzy (and when I posted on their forum asking about it, they banned me). The system I created was trading the forex markets using a free API from CMS Forex and programming in C# (pronounced "C Sharp"). The problem was that it didn't really provide much of a profit, the drawdown was too great and the upside too small, a basic system using moving averages with a trailing stop is more profitable and with smaller drawdowns. Of course, as I mentioned, I didn't really get their calculation of N so what I did was assumed that N was 1% of account size and ran with that so maybe that was the difficulty.
You know I didn't know that someone is distributing this famous Turtle rules... Thanks for the link.
I read about turtles in Schwager's "Market Wizards" books.
I personally beleive that most of this trading rules is a scam - if someone is willing to share this rule with you it shall probably not work...
As far as I know most automated trading rules are found by accident. You should try number of different trading rules with different parameters used on various instruments and you can find by accident trading strategy with a good sharpe ratio.
I didn't know that you can write C# code for CMS Forex.
I thought most of individual speculators use Saxobank's scripting language...
Where are you from?
BTW: You may check my blog tradingstyle.blogspot.com which is more about trading than this one.
I grew up in America, and as you can probably see by my IP, I'm currently in India, about to start my MBA here in fall '08. I took a year off for writing these systems. I have a Bachelors in Business Adminsitration. I've been trading spot forex on and off for about four years (just on my own no professional experience).
I tried to use tradestation to create the system, but it was too constrictive, I've seen Saxo's language but again it was a bit constrictive, if its more open now I don't know. I'm quite content with C# and an API (though the API is a little buggy, if you want a dependable API for actual trading I'd go with Oanda's API but its $600/mo).
By the way, this is a great site, I have been looking for something like this for awhile. The finance field is huge, though it doesn't seem so from the outside. Thanks for being a guiding light.
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