Inspired by a friend recently laid off from his exotic derivatives banking job, following is a self-help guide to making a (potential) living without the downside of having to work for people you don't rate.

This friend, a seasoned specialist in exotic derivatives in a number of different asset classes, recently lost his job. His employer, a Tier-2 investment bank decided to close down their structured derivatives operations and therefore, had no need for his services anymore.

He had been in the industry quite a while and did not fancy rushing into another appointment of similar sorts. Instead he chose to take a few months off in order to try out something that he had considered for a while: working for himself and executing trading strategies on his personal account.

A one-man hedge fund so to speak.

A few weeks in, we met up and the set-up sounded enormously enviable.

He rented a flat in Hedge Fund Central (SW1), equipped it with a couple of computers and phone lines, arranged online access to brokerage accounts and Bloomberg, and well, that was about it. I did think that renting a flat for this purpose was a little bit indulgent, but if you have a dream and can afford to live it, why not? (But note: this could probably be done from home as well.)

So what does his day look like?

• Get to work at whatever time you choose.
• Dial into morning briefings of a few banks with whom he executes trades.
• Run some analysis on possible strategies, and possibly execute some of them with little capital.
• Walk up to Oxford Street and have lunch at Selfridges. (I do envy this part particularly having discovered the Tom Aikens deli and their fantastic baguettes.)
• Go to the gym for a while after the morning's stress.
• Go back to your own little HQ, check the strategy, lock in gains, or cut your losses.
• Go home and play with the kids

Sound too good to be true?

A few things should be considered:

• Being your own boss definitely has advantages since you can tailor your schedule around other interests
• Trading on your own account has the obvious advantage that all gains go straight into your pocket
• Trading on your own account has the obvious disadvantage that all losses go straight out of your pocket as well. At least in traditional employment your salary is floored at zero!
• It does require an enormous amount of self-discipline. If you have developed a strategy you think is viable, you need to stick it out. There is no waiting for markets to bounce back if things go against you, or if your strategy turns out to be loss-making.

Whilst he is trading his way through turbulent markets and is the happiest he has been in a while, I still find myself in permanent employment in an investment bank.

My gym visits are strictly for after work, and the tasty Tom Aikens sandwiches are postponed to weekends in favour of the usual EAT and Pret fare.

But when I go home in the evening, I do not have to worry that a year of my son's tuition has just been lost since Mervyn King decided not to lower interest rates.

And that for the time being, makes me sleep quite well.

Here Is The Writer : Billy No Box

Billy No Box has worked in the city for six years, and currently works in Derivatives for a North American bank. He enjoys playing golf, reading books by Umberto Eco, singing "Copacabana" in the shower and at karaoke bars, and occasionally updating his blog about London and everything else.

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