Take five underemployed pilots. Give them intensive market training, add an investment portfolio to experiment with, compare them with a control group from other sources and see what happens.
This is what a small London-based trading company did in August, hoping to prove the “discipline, control, process and self-awareness” that pilots show in the cabin would translate into results above the average in the financial markets.
Kate North-Hill, a 45-year-old captain with 20 years of experience who lost her job when Flybe collapsed in March, was one of a group selected from a group of nearly 200 candidates to train at Amplify Trading and had a chance to share the profits of a small portfolio that she would manage.
The mother of four had not previously considered trading, but realized that “markets are extremely flooded with pilots” and that airlines in the near future would be cutting jobs instead of creating them, as the pandemic pushed the industry into crisis.
Mrs. North-Hill’s initial impressions, along with those of two other pilots who became trainee traders, seemed to prove the theory put forward by Will de Lucy, the head of Amplify and the creator of the experiment.
“It’s very similar to flight training,” says Ms. North-Hill, two weeks on a five-week program, which typically costs £ 5,000. Offers training, 60 percent of all profits made in approved deals on a case-by-case basis and protection against any losses.
“[As pilots] we have to think in advance of critical situations. . . what will happen when you are coming to earth, that kind of thing. It is exactly the same thing in commerce, when the market is going up or down and is moving very sharply. “
Another parallel is that pilots “monitor the weather, almost constantly, and traders monitor the news almost constantly”. For Ms. North-Hill, that meant exchanging one app on her phone for another.
Dan Norman, 32, who was a pilot for Virgin Atlantic for 12 years before being fired in the summer, replaced his daily cabin checklist, which featured things like his flight plan and fuel needs, with a commercial one, including deciding with advance at what level he would buy or sell a stock.
Samir Patel, a 36-year-old pilot who had been with easyJet for seven years before getting a license, says there is “overlap” in the personality type to fly and operate; both require determination and rapid and effective processing of much information.
However, the pilots soon realized that they needed to reframe their views on risk – they should be willing to take some. “The severity of the loss of a plane’s entire lives is huge, so you want to make sure there is zero chance of that happening, but losing a few pounds in a negotiation is. . . it’s not the end of the world, ”as Ms. North-Hill says.
Halfway through the program, the three felt they were doing well and were excited about the trade as a means of earning some extra money during lulls in the aviation industry, or as a possible full-time career.
The results of the experiment, however, showed that all pilots had a general loss, although their trading period coincided with a record rally global actions. Three or four in the control group have made overall profit and continue to trade with Amplify’s capital, maintaining 60 percent of their profits as their skills increase.
“I was a little disappointed,” said de Lucy. “Dan was incredibly promising. . .[but]he would stay in positions for a long time, he was absolutely convinced of a point of view and he just didn’t leave it. ”
Mr. Norman remains burned by the loss, which he attributes to underestimating the volatility of gold. He also underestimated “how trading professionally can affect someone’s personal life, as I think it would be difficult to just ignore a bad day”.
He was not alone – in general, the pilots maintained their positions for an average of 102 minutes, compared to the control group average of 52.7 minutes.
Patel says he was “destroyed” to end up in the red, largely because of beginner mistakes. “[In] my first trade. . . there was no discipline, structure, planning and a [I] I also made an unintended order placement, which caused a shocking loss, so in four days I just made that transaction, ”he said.
Mr. de Lucy had high praise for Mr. Patel and Mrs. North-Hill, who were doing the program part-time and still have a chance to end up in the blue. “Skills are definitely transferable,” says Mr. de Lucy. “But that does not mean that you can speed up training.”
Jason Sippel, head of global equity trading at JPMorgan and the son of a pilot, says it is “absolutely possible” for pilots to turn to trading roles.
JPMorgan has experience in lateral hiring from other areas. Previously, it supported military veterans who took on commercial and investment banking functions, after recognizing that calm under pressure forged in combat can be valuable in finance.
Mr. Sippel says that good traders are “very determined about getting out of a losing position – they accept reality, even if it is a painful reality”.
He thinks pilots would be better suited to trade things like exotic instruments, include more complicated derivatives, “where the risks to be managed tend to be more technical and include a level of consideration that would not seem strange to someone trained in the complexity of aviation and engineering ”.
Fraser Silvey is managing director of Connor, a UK-based human resources consultancy, and has worked with clients in career transitions for 20 years. He says it is important for pilots to “make peace with” leave their old world behind, even though career change has been imposed on them.
“[If they don’t,] there is a great risk that this will happen. . . and any potential employer has an uncomfortable doubt that ‘you’ll only be with me while the aviation industry is in decline’ ”, he says.
Patel and Norman say the trade cannot reproduce the buzz of flying. Mr. Patel is back on the air, part time, and continues to trade demo accounts to develop his skills. The plan is “to allocate my own funds in manageable stages in order to have a little more financial freedom and do my daily work just because that is my passion”.
Norman is now working as a flight instructor and has opened a new business selling coffee online and in stores, but says that negotiating is something he will “explore more” in the future.
As for Mrs. North-Hill, she finds trade stimulating and likes the flexibility it gives her to spend more time with her children. “I’ve had time off before, for maternity, but I always wanted to go back,” she says. “This time is different, perhaps because there is no ‘back’ where to go.”