How it is to have a trading job at Goldman Sachs or Morgan Stanley
Both Goldman Sachs and Morgan Stanley have now released their 10Q forms for the third quarter of 2014. As usual, these contain details of their trading revenues on a daily basis over that three month period. And as ever, they reveal big differences in the way that banks approach trading.
The telling charts are embedded below.
What it's like to work in trading for Goldman Sachs: Big gains, big losses
If you work as a trader for Goldman Sachs, you will have days of great plenty. And you will have days when you make losses.
As the chart below shows, there were eight days last quarter when Goldman's traders made more than $100m. And there were four days when they made between $75m and $100m.
Goldman's trading business isn't that interested in making small amounts of money - there were only 12 days when it made 0-$25m. The business made more than $50m on 40% of the trading days last quarter.
However, Goldman's trading business is also unafraid to make a loss. There were eight loss-making days in the three months to October. On two of those days, the bank lost more than $50m.
Goldman Sachs' daily trading revenues in the third quarter of 2014
Source: Goldman Sachs
What it's like to work in trading for Morgan Stanley: Small gains, smaller losses
Compared to Goldman Sachs, Morgan Stanley's trading business is safe. It doesn't have many days when it makes more than $100m. It has a lot of days when it makes between 0 and $25m. And it doesn't (or at least didn't in the last quarter) have any days when it makes a loss of more than $50m.
Morgan Stanley's trading business only made a daily profit in excess of $50m on 20% of the trading days last quarter - half the incidence of Goldman Sachs.
If you want to work for a trading business that plays safe, you may want to work for Morgan Stanley. If you want to work for a business that takes risks and - usually, but not always - wins, try Goldman Sachs.
Morgan Stanley's daily trading revenues in the third quarter of 2014
Source: Morgan Stanley