How it really is as a trader at Goldman, Morgan Stanley, BAML, JPM...

What's it really like to work as a trader at a big American bank now that big American banks don't do proprietary trading and are more wary of taking risks? The recent 10Q filings of some of the largest U.S. banks (Wells Fargo, Jefferies, J.P, Morgan, Goldman Sachs and Bank of America Merrill Lynch) offer a few insights. Based on figures for trading profits and losses in the second quarter, these are our inferences of the trading mentalities at each firm.

Wells Fargo trading results: Super cautious and quite conservative

• Four days of trading losses in the three months to June 2013
• No days of losses in excess of $20m
• No days making more than $30m
• No days making more than $100m

Wells Fargo's graph depicting revenues in its trading business is more detailed than those of the other banks we're looking at - it shows detailed revenues on a daily basis for the first six months of 2013. The graph below suggests a bank that is risk averse and operates a small trading book. If you're a trader at Wells Fargo, expect to work within serious limits. Don't expect to make big money on a daily basis.

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Jefferies trading results (second quarter 2013): Very careful, quite boring

• Five days of trading losses in the three months to June 2013
• No days of losses in excess of $20m
• No more than five days making more than $30m
• No more than five days making more than $100m

Jefferies' trading results for the three months to May 2013 show a bank that is more daring than Wells Fargo - but not by much. The bank had a few days of small trading losses and several days of mediocre trading profits, but there were no days of dramatic trading wins (or at least it doesn't look like there are - Jefferies doesn't break anything out above $10m). It seems likely that traders at Jefferies work within strict trading limits and with small trading books.

JPMorgan trading results (six months to June 2013): Little loss tolerance, excellent money-maker within strict risk parameters

• No days of trading losses in the six months to June 2013
• No days of losses in excess of $20m
• Around 117 days making more than $30m
• Around 11 days making more than $100m

JPMorgan's trading results are obfuscated by the fact that it only produces them for the past six months of 2013 - not for the past three months alone. However, even within this longer time period one thing is clear: J.P. Morgan is a brilliant place to work as a trader and is excellent at taking risk. Despite making more than $100m on 11 days and more than $30m on 117 days ( Wells Fargo had no days of making more than $30m), J.P. Morgan had no days of trading losses whatsoever.

The implication is that traders at J.P. Morgan can expect to be given generous risk limits, but can expect to have their performance monitored incredibly closely.

Morgan Stanley trading results (second quarter 2013): Big loss tolerance, big appetite for trading revenue generation

• 12 days of trading losses in the three months to June 2013
• Around five days of losses in excess of $20m.
• Around 39 days making more than $30m.
• Four days making more than $100m

Morgan Stanley's trading business had an excellent second quarter, and this shows in the bank's day-to-day results. It made healthy trading profits on 39 days and very healthy trading profits on four days. However, it also had an unrivaled 12 days of losses, and five days when these losses were very substantial. It looks Morgan Stanley is encouraging its traders to take more risk in an attempt to boost revenues, but is having to suffer the consequences.

Goldman Sachs trading results (second quarter 2013): Tolerant of losses, unsurpassed at making big money on a daily basis 

• Six days of trading losses in the three months to June 2013
• At least 2 days of losses in excess of $20m.
• Around 49 days making more than $30m.
• Ten days making more than $100m

Goldman Sachs remains the unrivaled king of investment banks' trading businesses. Yes, there were losses in the second quarter - and yes, there were two days when those losses exceeded $20m. However, in three months Goldman had ten days when its net trading revenues exceeded $100m - nearly comparable to J.P. Morgan during the entire first half of the year. If you work in trading for Goldman Sachs expect to take big, informed risks and to make a lot of money as a result of them.

Bank of America Merrill Lynch trading results (second quarter 2013): A less loss-making version of Morgan Stanley

• Seven days of trading losses in the three months to June 2013
• At least two days of losses in excess of $20m.
• Around 34 days making more than $30m.
• Three days making more than $100m

Bank of America's co-chief operating officer is Tom Montag, who was previously co-head of the securities business at Goldman Sachs. Montag joined Bank of America Merrill Lynch (BAML) in 2008 and set about revamping the bank's sales and trading business. In the second quarter of 2013, BAML did well - but not as well as Goldman Sachs. It achieved 34 solid days of more than $30m, but seven days of losses. There were only two days when trading profits at BAML exceeded $100m. If you work in trading at Bank of America Merrill Lynch, it looks like you'll be given a lot more access to trading flows and more freedom to take risks than at somewhere Wells Fargo, but you won't get the opportunities to make big profits that are on offer at Goldman Sachs.