Hedge Fund Traders and Skill Sets

Last time we looked at the types of positions open at hedge funds for those who are interested in trading securities and executing investment ideas. Now we’ll look at the background required for junior and senior level traders.

At the most junior level, a trading assistant would perform a support role for trader or senior trader at a hedge fund. This person would need a college degree, excellent math and Excel skills, and would probably have worked as a summer intern on a trading desk, either on the sell side or buy side.

Believe it or not, even this junior-level position sometimes requires a Ph.D.-level background from a top school. That’s because many hedge funds use highly sophisticated, proprietary trading systems that require an understanding of complex algorithms and “black box” trading strategies.

At the trader level, a hedge fund would be looking for someone with a successful track record as a trader. A large money manager, for instance, needs a trader who can work with the firm’s portfolio managers to move in and out of positions with minimal transaction costs.

This trader would need to add value to the firm by developing his or her own market insights. He would build relationships with key counterparties and constantly be reviewing the firm’s trading processes to minimize risk and improve efficiencies.

Finally, for more senior level traders, hedge funds demand a solid track record, a definite philosophy on investing, and the numbers to prove it. At JobSearchDigest.com, we have seen employers ask for “a Sharpe ratio of 2 plus, as well as a scalable, proven strategy” and more than a simple back test to back it up.

Traders are a different breed than research analysts. You both may share an interest, or even a passion for investing. But as a trader, you’ll also probably enjoy the adrenalin rush that comes from executing a winning trade in a tight timeframe.


Schwab, Claude. Hedge Me. The Insider’s Guide”U.S. Hedge Fund Careers. Lynx Media


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