CFA

[Mikael 31]

Do any of you guys hold a CFA? I'm thinking of trying to get it. I know it's going to be a very long process but seems the gain in knowledge and new opportunities might be worth it.

 

Would be good to hear from you if you hold a CFA! Thanks

 

PS. Not sure if it would help with trading but it does have some portfolio management in there. So for all you CFA holders, did it help with your trading as well?  

 

 

[Marco 223]

Do any of you guys hold a CFA? I'm thinking of trying to get it. I know it's going to be a very long process but seems the gain in knowledge and new opportunities might be worth it.

 

Would be good to hear from you if you hold a CFA! Thanks

 

PS. Not sure if it would help with trading but it does have some portfolio management in there. So for all you CFA holders, did it help with your trading as well?  

I did CFA 7 years back or so. It has a good bit of statistics in there which might help you to understand probabilities and trading them (with options) better. Also it might help you to read a companies report, balance sheet and P/L etc. and understand that much better so that might help you if you want to trade fundamentals. All in all it is a qualification that seems highly regarded in the fund management industry less so in banks (at least here in Europe) if you have any ambitions to go into that direction. It covers a LOT of things that got not much to do with trading. So if you want to do that to become a better trader I reckon if you spend the same effort (pretty much every weekend 6 months prior to each level exam (there are 3) is a write off unless you are a much more efficent learner than I am - I wouldn't even say smarter as a lot of it is learning facts as much as concepts) on a more trading related program you'll benefit much more than from a CFA

[Mikael 31]

thanks marco! did you find passing all 3 tests consecutively extremely difficult? (the pass rate seems to indicate that, someone people point out the probability of passing all 3 tests consecutively based on 2012 pass rates was about 9%). 

 

any tips for studying? I guess there's no shortcuts you really just have to sit down and review all the material. I did some research and it seems most people study much more than the 250 recommended hours by the CFA institute. did you go to prep classes etc.?

[Maxtodorov 19]

I looked into getting one. However decided against it. I think you need to ask yourself a question: Why do you want it? 

If you are looking to get a job in the industry, then yes its a good certificate. If you are interesting in learning, I say its ineffective use of time. 

 

I have meat many CFAs, who passed the exams (3 of them), and after a year forgot most of the theory. Then they do not use the knowledge, and end up not having practical experience either. I often have conversations with my CFA friends, and concepts like implied volatility, implied move (based on price of straddle), option greeks, are concepts that they are familiar with, but they do not have practical understanding on how to utilize it. 

 

I have become a much better options trader, just learning and reading on my own. In fact doing most of SO and Achor trades, as I evaluate them, prompt the right questions, that I research and try to understand. 

 

If you understand how a Gamma of option behaves near expiration vs. a Gamma of further out option and how that relationship is impacting your profit or loss, you are probably a better trader than an AVERAGE CFA who is NOT a professional trader. 

Edited June 27, 2013 by Maxtodorov

[Mikael 31]

To be honest, i'm just trying to build up my credentials right now. I'm still relatively young, turned 25 in Feb of this year. I worked as a junior analyst in a private equity fund in Asia for 2 years after i graduated, but i felt like i need more schooling. I got really interested in securities and corporate law so i'm actually going to law school next year for that. But i have this one year in between, so i thought it would be a productive use of time to try to do the level 1 CFA exam. Of course, everyone i talked to at the investment banks and the PE funds all encouraged me to go for it, because for them there is no better starting qualification. 

 

But i'm not sure if there's any point in holding a CFA and a JD, I'm not sure if its feasible to even go into both fields (though they are related), well i guess it is possible. Chris from this forum is a great example. But there are so many smart people here so i just wanted to get opinion from you guys as well. 

[Marco 223]

I looked into getting one. However decided against it. I think you need to ask yourself a question: Why do you want it? 

If you are looking to get a job in the industry, then yes its a good certificate. If you are interesting in learning, I say its ineffective use of time. 

 

I have meat many CFAs, who passed the exams (3 of them), and after a year forgot most of the theory. Then they do not use the knowledge, and end up not having practical experience either. I often have conversations with my CFA friends, and concepts like implied volatility, implied move (based on price of straddle), option greeks, are concepts that they are familiar with, but they do not have practical understanding on how to utilize it. 

 

I have become a much better options trader, just learning and reading on my own. In fact doing most of SO and Achor trades, as I evaluate them, prompt the right questions, that I research and try to understand. 

 

If you understand how a Gamma of option behaves near expiration vs. a Gamma of further out option and how that relationship is impacting your profit or loss, you are probably a better trader than an AVERAGE CFA who is NOT a professional trader.

I would make 2 points.

- I think you can argue that any education that you don't use in practice will end up being forgotten soon.

- CFA doesn't aim to be a traders qualification. If anything it targets asset manager or research analysts. So it doesn't surprise me that the average (even part time) trader has more trading knowledge that a non trading CFA

[Marco 223]

thanks marco! did you find passing all 3 tests consecutively extremely difficult? (the pass rate seems to indicate that, someone people point out the probability of passing all 3 tests consecutively based on 2012 pass rates was about 9%). 

 

any tips for studying? I guess there's no shortcuts you really just have to sit down and review all the material. I did some research and it seems most people study much more than the 250 recommended hours by the CFA institute. did you go to prep classes etc.?

I wouldn't say EXTREMELY difficult but you definitely have to put in the hrs. I think the low pass rates are also due to people who under estimate the challenge and DON'T put in the hrs thinking well I have this degree in economics - how hard can it be. I'll go over the material over a month before the exam and I should be fine. Everyone I met with this attitude failed level1 .

So 250 hrs+ sounds about right to me. I spend most weekends studying about 6-8 hrs a day. I started 6 month before each exam this way you can allow for the odd weekend off (otherwise you might go insane or lose all your friends) or can catch up if you fall behind. I did that working 10-11 hr days during the week so not quite sure in hindsight where I found the commitment to do that but somehow it worked.

Again I wouldn't see that as the best way to spend 750+ hrs to become a better trader that's not really what this is about.

[Tradervic 0]

I have a CFA, took it some time ago.  I found it more theoretical than practical. I already have an MBA so a lot of the stuff was nothing new.  However it does make you appear that you know more than you really do, and builds confidence in people when they meet you. But as a certificate, I felt it was overated.

[mike_tee_vee 35]

Mikael, I recall that you are in Canada.  Have you heard anything about the Chartered Investment Manager designation?  I don't know much about it, but I thought I'd throw it out there.

[Mikael 31]

Hi Mike, yeah i looked into it. Basically in Canada if you want to be registered as a portfolio manager, you need to hold either a CFA OR a CIM (chartered investment manager). Unfortunately, CIM isn't recognized worldwide like the CFA so if you want a bit more flexibility i think the CFA would be a superior "charter" to hold. 

[greeksgeek 0]

I passed the CFA exams in 2003.  If you have interest in becoming a (non trading) investment professional and/or convincing someone you are serious about investments after you finish your law degree, the CFA will improve your credibility in many cases.  For example, I have a PhD in a non-finance field and my experience is that finance and investment professionals seem to assign more value to the CFA.

 

The material related to the CFA exams will make you familiar with a wide range of industry standard terms, concepts, techniques, and ethical considerations.  As noted in previous posts, the test is very passable if you make time to study and it is not likely to improve your options trading skills.  If you think the CFA will be helpful for your career, my advice would be to take it now while you are still in the habit of studying and your time is perhaps more flexible.

[cwelsh 1,549]

I'm NOT a CFA, nor have I really looked into it.  I am however a RIA (registered investment adviser), which is what you need to be in the US to mange portfolios and people's money. 

 

I can say I don't personally know anyone that has a CFA, that actually advertises it.  Canadian requirements are quite different though.

[positiontrader 2]

I think the AFM(dutch regulator)  is interested in the combination law school CFA  and knowledge of options is also an advantage

you are Dutch  if i am not mistaken Mikael

[Mikael 31]

I am not dutch but i would have no problem moving down there if they are interested in hiring me after i finish! I have good friends down there