What's it like to be an arbitrage trader?

Matthew DiBiaseName: Matthew DiBiase
Graduation date: May 1982
Major: Economics
Current position: Proprietary trader with specialty in covertible arbitrage and options arbitrage

What is the nature of your work?
Trading internal capital of the firm.

What does a typical day consist of? What do you do? When do you start? How late do you work?
Day starts very early. I try to read the papers before getting to office by 7 a.m. The morning is very important in the trading business. Any overnight news must be digested. What is happening in overseas markets? Any economic numbers that may be coming out(C.P.I.,P.P.I.,employment #'s, etc.). Research upgrades/downgrades. What is the bond market doing? All these things must be taken into account before the start of the trading. Once trading begins I'm constantly searching for opportunities and inefficiencies that can be profitably exploited. The market closes at 4 p.m. and then positions are checked and discussed and then I watch for any news that breaks after the market that will have an impact the following morning.

What's the best way of learning more about the work you do?
Talking to traders or, if possible, sit on a trading desk.

Looking back at your undergraduate days at Rochester, what courses or activities were particularly valuable for your current position?
Macroeconomics. Any macro course is going to be very useful. The relationship between interest rates, currencies, inflation etc. is very topical. The world economy is so much more connected now than it was when I was an undergrad, so any international economics course would be great.

Calculus. Not the super advanced theoretical stuff but basic calculus or statistics is a big help. Any good trader has to have a good handle on math.

Activities- I was fortunate enough to play intercollegiate athletics and that was a tremendous experience and helpful later on. Knowing how to win and lose the proper way,interaction with your teammates,pulling for each other. I realize that not everyone will participate on that level but try intramural or a non-sport group where you have to work with and relate to different groups of people. That will be helpful after your college days.

In retrospect, were there things you wish you did more of?
I wish I took more classes that were totally unrelated to my major. Philosophy or psychology would have been very interesting I believe. Take advantage of all the university has to offer.

Is there anything that you would like to advise our majors today about their future?
Have passion for whatever you do. Great passion. Believe in yourself. Do not let anyone tell you that you cannot succeed and achieve your dreams. You are attending a great university so you have been a great success already. The opportunities for you are exciting and endless.