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NoiseLiving and Trading in Electronic Finance$
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Alex Preda

Print publication date: 2017

Print ISBN-13: 9780226427348

Published to Chicago Scholarship Online: September 2017

DOI: 10.7208/chicago/9780226427515.001.0001

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PRINTED FROM CHICAGO SCHOLARSHIP ONLINE (www.chicago.universitypressscholarship.com). (c) Copyright University of Chicago Press, 2022. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in CHSO for personal use.date: 06 July 2022

How Does One Become a Trader?

How Does One Become a Trader?

Chapter Two How Does One Become a Trader?

Alex Preda

University of Chicago Press

Chapter 2 examines the links between noise and institutional trading from the viewpoint of each one’s capacity to morph into the other. While noise and institutional trading are usually regarded as conceptually separate, this chapter shows that there are practical circumstances in which they mutually support and reproduce each other. Based on participant observations and interviews, this chapter shows how financial institutions encourage noise trading as a recruiting ground and how former institutional traders and finance professionals craft second careers for themselves in retail brokerages and advisory firms. The setting is provided mainly by the activities of student trading clubs, which work as recruitment grounds for banks and other financial institutions. The chapter examines the ways in which trading clubs replicate formal structures from financial institutions, and initiate activities meant to pre-figure and facilitate recruitment of their members by these institutions. As such, activities as retail traders are not incidental, but organized. They precede careers as professional traders within banks and financial firms. Overall, the chapter’s argument is that from an institutional point of view, noise and institutional trading are not completely separate and that transitions from one domain into the other regularly take place.

Keywords:   student trading clubs, elite professions, recruitment processes, financial institutions, organization

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