When he was only 24 years old, David Kate established his own trading company. At that time, the company's capital was only 25,000 pounds. At the age of 36, he is the president of Kate Group and Kate Brokerage, and his operating margin has increased to several million pounds. Kate is also a director of the London International Financial Futures Exchange.
"I'm not here to make a living, but to make money."
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"My interest in the market can be traced back to many years ago. There was extracurricular teaching in the middle school economics course. I was about 16 years old. We visited the London Stock Exchange; at that time, there was no futures exchange in London. The market seemed to offer some insight. It’s an easy opportunity to make money, which aroused my interest; in fact, everything started from this."
"Initially, I didn't do anything, but this visit left a deep impression in my mind. After graduating from high school, I went to an accounting firm; a year later, I found that I was not suitable for this job. So, I started looking for opportunities everywhere again. There were far more opportunities than now. In 1979, I found a stockbroker as a general clerk. This is a typical job that middle school graduates can find. The company is called Smith Brothers. Merged into the Merrill Lynch Group. I am a very aggressive young man,' I hope to be transferred to the stock exchange,' 'I'm sorry, we are swamped now, there are no vacancies at the moment,' 'I want to be there, the clerk's Work bores me to death, it’s not suitable for me.’ After three months, I found a job in a stock brokerage company called Kilber Elliott. They gave me a chance in 1980. In January, I became a "blue button," in other words, a brokerage assistant on the stock exchange. I have been engaged in this job, and later became a broker on the stock exchange, and finally a floor trader."
"Like most people, the main motivation is salary. We often hear about how these people succeed and how to make money. I heard how luxurious the houses of stockbrokers are and how to make money from stock trading. This is what attracts me. Soon, when I become a stock trading broker myself, I think this is a good opportunity; I check prices at any time and match customer transactions, but I want to find some orders by myself and establish my own brokerage business (on behalf of customers). I want to control my destiny. I don’t want to help others to check prices. So I entered the office and started discussions with clients, hoping to find some orders."
London International Financial Futures Exchange
"After two and a half years, I heard the news about the London International Financial Futures Exchange. I tried my best to persuade the partners of the company to buy a seat. Unfortunately, they said:'Those wearing colorful jackets won’t be successful. That set of things can’t be done in London.’ So, they don’t intend to discuss this topic. However, I’m very interested in this aspect. One day, I saw the article published in the Financial Times. An advertisement:'London International Financial Futures Exchange hopes to find trading talents'. This sounds quite interesting. I arranged some interviews. No one has all experience with London International Financial Futures trading because it has not yet been established. Experienced people are commodity traders for futures trading, such as cocoa, sugar, coffee, and oil. These guys have eyes on the top of their heads, and stockbrokers are just pediatrics to them. I barely found a good one. Work, the salary is 50% higher than that of the stockbroker. I am pretty satisfied. In September 1982, I entered the market, initially stayed in the sugar trading place to absorb some experience, and then became a blue deduction."
"In September 1982, if you can make $200 a day, you are a superstar. If you lose $100 a day, it is equivalent to a catastrophe. This was the situation when the London International Financial Futures Exchange was just established. I have one F (two Fs refer to LIFFE, and one F refers to live). I help customers match orders and find ways to find business. Soon, the exchange introduced short-term pound contracts, which are three of the inter-bank market Monthly interest rate contracts. During this period, I gained some fame, mainly engaged in interest rate spread transactions. The transaction content was basically to buy and short contracts for other months at the same time. I established some brokerage reputations from the operation. From this point of view, customers know that their matching prices are good. This has aroused my interest and other people’s interest in me. They saw my performance, and I started to get some orders from large institutions. Of course, compared to the current one. Say, that's nothing great."
"After three months, a certain company that I helped them to match transactions approached me, invited me to join the company, and the salary was doubled, and I agreed. During this period, in addition to trading accounts with our customers, we also began to provide Market services. This improves our reputation because we represent the market. We provide market liquidity and earn brokerage fees. If our bid/sell quotation is 1-3, the quotation provided by others is 1-4; we might say: "Okay, our selling price is reduced to 2," The quotation is 1-2, which is good for both parties. The whole situation is developing well, and the customers are satisfied with the price they got. So after several years- Not only did I earn a lot of brokerage commissions for the company, but the trading account was in good condition. I drew a lot of bonuses-I thought if I was good at this, I should do it myself. So, in 1985, I became an independent Floor trader."
"I can't afford a trading seat because the funds accumulated in the past few years are not much. The seat's price is 30,000 pounds, and I only have 25,000 pounds on hand, and I need this money as trading capital. However, I and the previous company An agreement was reached. I helped them engage in brokerage work at a lower rate and exchanged a seat for them at a low price. This arrangement can be happy: they can help customers execute transactions at a good price and treat me as a product. , I am working on two aspects at the same time."
"In 1985, under natural circumstances, I established the Kate Group. There were no special plans and no special plans for the future. Now, we have more than 100 traders, and the results are quite good. We recruit one every other period. A trader, he did a good job, so we recruited another trader, his performance is also good, so gradually developed."
"In the beginning, I was engaged in the activity of market making-constantly providing two-way quotations. When trading spreads, you buy and short simultaneously; try to make a little bit here and a little bit there. Assuming that the market is 1-2, we try to provide A better offer, earn an extra 500 or 1,000 dollars, assist customers in getting out of the market through market-making activities, and earn a little by themselves. If you make 500 dollars per transaction, 20 transactions are 10,000 dollars."
"The current bond spread transaction, the contract that expires once in three months, the transaction may be concentrated within a week, and other times have to find another way-this is part of the long-term interest rate. For the short-term interest rate, you can do it every day by Trading in spreads. Since interest rates have risen sharply for a long period, the price volatility is often concentrated in the longer-term part."
"Except for spread trading, we only do position trading. When I first engaged in spread trading, the US interest rate was as high as 14%, so the market fluctuated sharply. Now, the market no longer has this degree of volatility. I think the situation may change. If so, I will return to the short-term interest rate market. However, for now, the gains from longer-term transactions are still higher than the losses."
"In a typical trading day, market-making activities must provide two-way quotations, constantly buying and selling, and at the same time accumulating positions through market-making activities. We always provide people with opportunities to enter and exit the market, but we also want to establish A certain position. Provide market liquidity; we can create profit. Of my profit, about 50% to 60% comes from '6 buy/8 sells' or '8 buy/9 sells'; this also allows me to establish the position I want. In addition, if the judgment is wrong, the loss will not be too serious because a good profit has been accumulated in the whole process. Therefore, even if I am optimistic about the market, I may stand as the seller. But one is the long-term layout, and the other is the short-term situation."
If a market maker also wants to establish a position, it is often quite tricky. If a market maker wants to buy long-term German government bonds because he believes that prices will rise, he must also sell them as long as someone wants to purchase long-term German bonds. Because as long as someone inquires, the market maker must provide a two-way quotation for buying and selling, and it is impossible to know in advance whether the inquirer wants to buy or sell. The inquirer may not accept the source of a particular market maker and find a better price, but as long as the inquirer decides to trade, the market maker is obliged to change based on the quotation.
You are great because you love trading; you love trading because you are great.
Whether in general industry or a specific transaction area, Kate has demonstrated the qualities required for success. Devotion, perseverance, and self-discipline are all second nature. The necessary condition for possessing these qualities is the love of work. Kate is full of energy and enthusiasm for what he does. He believes that he can achieve his goal. In this case, it is hard not to have confidence. Kate doesn't think she is "work."
Kate's enthusiasm involves two levels: job content and employment pattern. Many people don't like their work because they are not their bosses, and they are not the direct beneficiaries of hard work. For Kate, the two cooperate, but not because he is lucky, but after careful arrangement. George Bernard Shaw once said: "You must be careful to get what you like. Otherwise, you will be forced to like what you have achieved." Christopher Morrie also noted similarly: "There is only one success-in your way. Live life."
"Now, I specialize in long-term interest rate transactions, including 10-year bonds, British government bonds, and German government bonds. This is the most interesting market at the moment and the most likely big market. I am here not to make a living but to make money. Take it and enjoy your work."
"The feeling of bearing everything alone makes me feel excited-you are your boss, and you are in control of your destiny. It is completely up to you. The transaction is straightforward, and the result is either making money or not making money. I don't need to rely on others. When you work for other people, if you make money, others will give you dividends; if you lose money, you get a salary. When you are your boss, I am the measure of performance, and I represent my value, no more, no less."
"If I want to take a break from playing golf tomorrow, I can do it. That's the beauty of a trading career. Moreover, no one knows what will happen tomorrow. What about the others? Whether professionals or the generally salaried class, almost every day, It's all routine. You deal with similar trivial chores every day. You walk into the office and leave the window if you are happy."
David thinks that he and other traders are different. They don't want to work on the 50th floor of the building. They almost know how much salary they can get when they retire.
"Like celebrities in any professional field, lawyers may earn seven figures each year, and top traders earn very high incomes. However, I doubt whether the legal profession is as interesting as trading. Yes, it involves pressure, but also, there is no pressure. Pressure is caused by tension. After the tension disappears, the pressure does not exist. You can build a huge position to create pressure, and then you start to worry about what will happen in Hong Kong or Tokyo that night. For example, with my current position, other traders may not sleep all night and feel very uncomfortable, but I have no problem at all. If a part makes me feel uncomfortable, I will think twice. If I feel relaxed, I don’t care about any possibility. I know what I’m thinking. I’ve judged whether it’s correct or not. Then I don’t know. Only time can decide. All of this is within the scope of my ability. Tonight, I am going to talk to a meat importer. Going out, he didn’t know that I shorted the British stock price index and went long British government bonds, and he didn’t want to know at all."
Although full of enthusiasm, Kate can also "cut," he believes this "stop in time" ability is essential. Those who love work often over-indulge and eventually exhaust their energy. Let your mind and body get a good rest to avoid dangerous situations. However, you must be cautious. Traders may also dislike their job content or employment status. They may persuade themselves to stop temporarily, but they are trying to avoid what they hate.
"In the process of each day, a good trader must be able to stop in time. If you barely stay on the floor to trade, other people may take advantage of it. They do not deliberately do this; it is purely subconscious behavior. Because trading is not, if it goes well, you will naturally think that other traders are against you. In addition, to rest your mind, you also need to stop temporarily. I think this will make a better trade. Even Babe Ross and DiMaggio, I don’t think about baseball and cricket forever."