Take five underemployed pilots. Give them intense markets training, add in an investment portfolio to experiment with, pit them against a control group from other backgrounds, and see what happens.
That is what a small London-based trading firm did in August, hoping to prove the “discipline, control, process and self-awareness” that pilots show in the cockpit would translate into above average pay-offs from the financial markets.
Kate North-Hill, a 45-year-old captain with 20 years’ experience who lost her job when Flybe collapsed in March, was one of the group selected from a pool of almost 200 applicants to train with Amplify Trading, and given a chance to share in the profits from a small portfolio she would run.
The mother-of-four hadn’t previously considered trading but realised “the markets are hugely flooded with pilots” and that airlines for the foreseeable future would be cutting jobs rather than creating them as the pandemic pushed the industry into crisis.
Ms North-Hill’s initial impressions, along with those of two other pilots turned trainee traders, seemed to prove the theory put forward by Will de Lucy, Amplify’s head and the creator of the experiment.
“It’s very similar to flight training,” Ms North-Hill says, two weeks into a five-week programme, which typically costs £5,000. It offers training, 60 per cent of any profits made on trades approved on a case-by-case basis, and protection from any losses.
“[As pilots] we have to pre-think critical situations . . . what’s going to happen when you’re coming into land, that sort of thing. It’s exactly the same in trading, when the market is going up or down and it’s moving really sharply.”
Another parallel is that pilots “monitor the weather, almost constantly, and traders monitor the news almost constantly”. For Ms North-Hill, that meant swapping one app on her phone for another.
Dan Norman, 32, who was a pilot for Virgin Atlantic for 12 years before being laid off in the summer, replaced his daily cockpit checklist, which featured things like his flight plan and fuel needs, for a trading one, including deciding in 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 he was furloughed, says there is “overlap” in the personality type for flying and trading; both require decisiveness and quick and effective processing of a lot of information.
However, the pilots soon realised they had to reshape their views on risk — they had to be willing to take some. “The severity of losing a whole aeroplane’s worth of lives is huge so you want to make sure there’s zero chance of it happening, but losing a few quid on a trade is . . . not the end of the world,” as Ms North-Hill puts it.
Halfway into the programme, all three felt they were doing well and were enthusiastic about trading as a means of making some extra money through lulls in the aviation industry, or as a potential full-time career.
The experiment’s results, however, showed that all the pilots made an overall loss, even though their trading period coincided with a record rally in global equities. Three or four in the control group made a profit overall, and continue to trade with Amplify’s capital, keeping 60 per cent of their profits as they grow their skills.
“I was a little bit disappointed,” Mr de Lucy says. “Dan was incredibly promising . . . [but] he would hold on to positions for a long time, he was absolutely convinced in a point of view and he just didn’t get out of it.”
Mr Norman remains burnt by the loss, which he puts down to underestimating the volatility of gold. He also underestimated “how trading professionally could affect one’s personal life, as I think it would be difficult to simply brush off a bad day”.
He wasn’t alone — overall, the pilots held their positions for an average of 102 minutes, compared with the control group’s average of 52.7 minutes.
Mr Patel says he was “gutted” to end up in the red, largely because of early rookie mistakes. “[In] my first trade . . . there was no discipline, structure, planning and a [I] also made an unintended order placement, which made a shocking loss, so in four days I only took that one trade,” he said.
Mr de Lucy had high praise for Mr Patel and Ms North-Hill, who was doing the programme part-time and still has the chance to end in the black. “The skills are definitely transferable,” Mr de Lucy says. “But that doesn’t mean that you can hasten the training.”
Jason Sippel, head of global equities trading at JPMorgan and the son of a pilot, says it’s “absolutely possible” for pilots to pivot towards trading roles.
JPMorgan has experience of lateral hires from other fields. It previously supported military veterans moving into trading and investment banking roles, after recognising that the calm under pressure forged in combat can be valuable in finance.
Mr Sippel says good traders are “very decisive about exiting a losing position — they accept reality, even if it’s a painful reality”.
He thinks pilots would be best suited to trading things such as 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 look unfamiliar to someone trained in the complexity of aviation and engineering”.
Fraser Silvey is managing director at Connor, a UK-based human resources consultancy, and has worked with clients on career transitions for 20 years. He says it is important for pilots to “make peace with” leaving their old world behind, even if the career change has been forced upon them.
“[If they don’t,] there’s a big risk that it comes through . . . and any potential employer has a nagging doubt that ‘you’re only with me for as long as the aviation industry is in decline’,” he says.
Mr Patel and Mr Norman say trading cannot replicate the buzz of flying. Mr Patel is already back in the air, part time, and continues to trade demo accounts to build his skills. The plan is to “allocate my own funds in manageable steps with a goal to having some more financial freedom and doing my day job just because that is my passion”.
Mr Norman is now working as a flying instructor, and has set up a new business selling coffee online and in stores, but says trading is something he will “explore further” in future.
As for Ms North-Hill, she finds trading stimulating and enjoys the flexibility it gives her to spend more time with her children. “I’ve had breaks before, for maternity, but always looked forward to going back,” she says. “This time is different, perhaps because there isn’t a ‘back’ to go to.”
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