What do a stock market trader and poker professional have in common? Enough for the former to become the latter.
That's what ex-derivatives trader Andy Frankenberger did three years before he pocketed $446,000, capturing his second win at a World Series of Poker event on Tuesday in Las Vegas, according to Bloomberg. Frankenberger, who worked at JPMorgan Chase and BNP Paribas SA before becoming a professional poker player, has won a total of $2.5 million from live tournaments so far.
Frankenberger isn't the only Wall Street trader to enjoy large successes at the poker table. Hedge-fund manager David Einhorn and former Bear Stearns trader Steven Begleiter are among many other Wall Street speculators who have also scored big at high-stakes poker events , according to the Wall Street Journal.
Why are former stock market speculators so good at poker? Trading stocks and playing a hand both require an ability to assess and manage risk, Aaron Brown writes in "The Poker Face of Wall Street," a 2006 book in which he makes a case for Wall Street traders to learn poker skills and vice versa.
Some firms already recognize the connection between the two fields. Toro Trading, for example, has asked job candidates to play poker to assess their high-speed trading skills, and Susquehanna International Group, a trading firm in Philadelphia, integrates the card game into training programs, giving new hires copies of poker manuals to study, the LA Times reported in 2010.
Yet the high-risk speculation used in poker and at Wall street firms has been named among the major culprits for the market's collapse during the financial crisis and, more recently, as the cause of JPMorgan's $2 billion trading loss.