Guest Post: Are Former Bank Prop Traders Potential Bartenders?
Submitted by Tyler Durden on 08/14/2012 - 14:53 BAC Ben Bernanke Capital Formation ETC Guest Post Lehman Market Conditions Reality Risk Management
undefinedWe thought it timely to repost this oldie but humorous goodie on how bank style traders make their money. Ever wonder why Goldman, or BAC can have 90 straight days of profitable trading? Don't wonder too much more, the answer is here. The new reality is however, Banks are fast becoming utilities now that they cannot hide losses in mark-to-myth book keeping (whale legacy), and have removed (or renamed) their Prop trading divisions. The recent purge of prop traders and subsequent start up of unprofitable funds can be attributed to many things; among them market conditions, 100% correlated markets etc. But the biggest for a certain type of trader is a lack of flow, i.e. no clients to fleece or front run.
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