Lehman Brothers
The Princeton Pre-Business Society took a trip to New York City to visit Lehman Brothers.
A number of employees set up a Market Trading Simulation, where we all ran around buying and selling oil contracts, S&P futures, and 10-Year T-bills. Some people acted as salespeople, who interacted with the “customers.” Lehman employees played the role of the customers: T Rowe Price, SAC Capital, etc. They gave orders on what to buy and what to sell, and in what amounts, to the salespeople. Salespeople, after creating a connection with the customer, relayed this order information to the trader in his or her respective “pit.” The S&P pit roared with energy as everyone bought and sold thousands of shares. On the other hand, the other two pits hardly moved from their starting prices. Afterwards, we had an opportunity to talk with some of the employees who told us about their jobs. Many were in fixed income, which relies heavily on the quantitative, mathematical side of the investment banking business.
The experience ended up very chaotic. When I played the role of a trader, my balance sheet made no sense, with missing blocks of trades. I think a simple computer interface could make this really easy, effective, and avoid the hassle of recording every transaction.