There are many subjects which seem to cause discussion on financial Twitter or fintwit to use its most common abbreviation. Of course, there’s been Brexit and Trump in recent years. Whilst the previous seems oblivious to ever ending (deal or not), the latter seems on the wane following the election. Other topics such as MMT seem in their infancy, and it’s unlikely they’ll go away as areas of discussion, whilst COVID is going to also be with us for a while.
A topic that has got a lot more traction is something which is totally made up. No, I’m not referring to fake news or its variants, or whatever you wish to call it. Instead, I’m talking about Industry, the new TV drama, which is on BBC TV (and you can catch up with it on iPlayer). It follows a group of new London based graduates seeking to land full time roles at Pierpont & Co., a large investment bank. Of course, it’s a drama, so everything is on steroids, with an emphasis on excess, whether it’s illegal substances, sex or offensive behaviour. So less Diet Coke, and more, well, its namesake, and more shouting on the trading floor, than instant messenger (although Bloomberg IB chat does make a brief appearance). Despite working on a trading floor for many years, it was pretty rare to hear a shouting match. And if anything, it was accompanied by sniggering by spectators, rather than being something particularly serious. Losing control of emotions is hardly a good characteristic for anyone who manages risk. As for the technical terms being banded around on Industry, some seemed right, others less so (referring to USD/GBP, rather than GBP/USD, a rookie error for anyone on an FX desk).
However, despite this, there was a modicum of truth in the drama, such as the relationship between sales and trading, where objectives can sometimes be at odds, as well as the contrast between IBD and the trading floor. The emphasis on how higher margin products are prized, given how lucrative they can be for banks, is also something which rings true (seriously, if you have a view on the market, I suspect most times you’ll be better off expressing it in cash, or using a relatively vanilla option, rather than some weird exotic where you pay a chunky spread and will be punished for even the thought of ever think of unwinding it).
The whole experience of being a graduate in a bank and the competitiveness and uncertainty of it all, also seemed to have a grain of truth in it. I remember the disappointment of not making the cut to join the CDO desk, which being 2005, was probably the hottest desk at the time. I ended up on the currency desk, which was in retrospect a much better option, so much so, that I’m still working primarily in currency markets, albeit as an independent as opposed to on sell side trading desk.
Once you’re assigned to a desk as grad, there can be the uneasy feeling that you really don’t know much about the market, and this was something which was felt by most of the graduates in Industry. I remember, at the start of my career, simply having very little idea about what was going on in markets. What’s long EUR/USD? I was too embarrassed to ask precisely what this was and was clueless for the first few weeks of the morning meeting (or perhaps rather longer than a few weeks in retrospect). It takes time to understand the market, and once you think you have magically figured it all out, is precisely the time, when you realise you really haven’t.
Over the years, the trading floor environment has become a quieter and a somewhat more inclusive place, compared to how it has been depicted in Industry. If anything the trading floors I worked in, were broadly friendly places, and I learnt a huge amount from my teams. However, it is still a high pressured place, even if it somewhat quieter. Furthermore, whilst there are many more options for graduates these days, particularly those on the more technical side, such as the Googles and the Amazons of the world, sell side firms still get a very large number of graduates applications. I would think, that it’s likely a lot more competitive these days to gain a graduate role in a bank and also to stay there, than it ever was when I started. Skills such as coding are no longer purely for quants and tech folks, but increasingly also expected of graduates elsewhere in the bank. Graduates are increasingly trying to learn Python before entering banks, and I’ve taught many MSc finance students my Python for finance course. If you’re a recent graduate and have seen Industry, is the show representative of your experience?
So yes, Industry, is an exaggerated representation of the trading floor, and it does leave out a lot of the more mundane elements. I worked in a research team, which by it’s nature tends to be quieter than sales and trading, so perhaps it wasn’t fertile ground for being the focus a TV drama (although I did enjoy the quip from the sales person and a client discussing the merits of research). Indeed, there are no scenes in Industry, where quants debug code, or a grad is faced with the drudgery of endless Excel updates (although PowerPoint does feature somewhat, in particular in the IBD scenes, in advance, apologies for the spoiler there). However, the underlying pressured environment of a trading floor, where success is prized and the tension seeking this creates, is something that Industry does capture.
I can see why Industry has evoked a lot of scepticism, but at least for me, I enjoyed it, despite all the inaccuracies. Let’s face it, a totally accurate portrayal would have been pretty boring too! Do I miss working on a trading floor after watching Industry? Perhaps, but I have to admit working in a startup today, is something that I enjoy even more at this point of my life.