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I work as a currency volatility trader and manage one of the bigger G10 blocs in London. I've been lucky enough to get responsibility early in my career. I started off managing a single currency book a few months into the job, and have steadily been granted more responsibility to where I am today. It's hard to say definitively what I do any given day, but usually it involves: constantly evaluating our positions (both in the light of my macroeconomic views and RV analysis), making markets for clients, and trading in the interbank market.

I think the thing I love most about what I do is the satisfaction you receive from getting things right. It's immediate gratification to be able to say each day what your contribution is... which also can make the job psychologically demoralising when you get it wrong; and you will get it wrong from time to time, that's a given.

Happy to answer any questions.

10

Comments (91)

  • Mps721's picture

    What would be your advice to a person wanted to start trading currencys. I have been trying to trade for the last 2 years but I have not had any luck, I find myself strategy hopping. Thank you.

    Mps721

  • Bobb's picture

    Awesome.

    When did you graduate from school?

  • In reply to Mps721
    Revsly's picture

    Mps721:

    What would be your advice to a person wanted to start trading currencys. I have been trying to trade for the last 2 years but I have not had any luck, I find myself strategy hopping. Thank you.

    My advice to a retail trader is that it's extremely difficult. There is so much flow and positioning you miss. The day to day price action can bare very little resemblance to fundamentals. Probably more people are watching FX spot than any other market.

    Hmm... that's not really advice... ok if you insist on trading, it's going to be very difficult for you to day trade profitably, probably easier to take intermediate term views.

    Jack: They’re all former investment bankers who were laid off from that economic crisis that Nancy Pelosi caused. They have zero real world skills, but God they work hard.
    -30 Rock

  • In reply to Bobb
    Revsly's picture

    Bobb:

    Awesome.

    When did you graduate from school?

    2010, undergraduate degree in Finance, Mathematics and Economics.

    Jack: They’re all former investment bankers who were laid off from that economic crisis that Nancy Pelosi caused. They have zero real world skills, but God they work hard.
    -30 Rock

  • SirTradesaLot's picture

    Thanks for doing this, I have enjoyed your posts.

    adapt or die:
    What would P.T. Barnum say about you?

    MY BLOG

  • rates fool's picture

    what range of products do you trade? in which products would you express your macro view? what are the major aspects/points/nuances of your product that you think are only learned on the job and cannot be gleaned just by reading papers/on WSO. Thanks for the thread, really appreciate these.

  • WallStreetOasis.com's picture

    Thanks Revsly!

    I have a question: how much of your trading and posistions (rough estimate) would you say are just hedges for the rest of the banks exposure and/or what % of your trades are purely proprietary.

    In other words, are you working in concert with other desks or are you putting on your own prop trades...or both?

    Thanks

  • yeahright's picture

    Any interest in leaving to do something else in the foreseeable future or are you in it for the long haul?

    Frank Sinatra - "Alcohol may be man's worst enemy, but the bible says love your enemy."

  • WallStreetBB's picture

    Do Banks still stop hunt traders?

  • In reply to rates fool
    Revsly's picture

    rates fool:

    what range of products do you trade? in which products would you express your macro view? what are the major aspects/points/nuances of your product that you think are only learned on the job and cannot be gleaned just by reading papers/on WSO. Thanks for the thread, really appreciate these.

    My core "edge" comes from trading options, which is my primary expression of view (whether it be one on gamma, vega, surface, etc), but often take positions in spot also.

    I also take rates views, which can be expressed via FX Swaps, IR Futures, IR Swaps, X-CCY Swaps, etc.

    Most of the nuances are difficult if not possible to learn from a post or paper; it comes with experience of dealing with the objects on a day-to-day basis.

    Jack: They’re all former investment bankers who were laid off from that economic crisis that Nancy Pelosi caused. They have zero real world skills, but God they work hard.
    -30 Rock

  • In reply to WallStreetOasis.com
    Revsly's picture

    WallStreetOasis.com:

    Thanks Revsly!

    I have a question: how much of your trading and posistions (rough estimate) would you say are just hedges for the rest of the banks exposure and/or what % of your trades are purely proprietary.

    In other words, are you working in concert with other desks or are you putting on your own prop trades...or both?

    Thanks

    Difficult to put a % to. Different people and different banks can handle this entirely differently. I tend to put on a position I want (core position) and trade around it. This might be something as simple as a "risk-on/risk-off" view, or as complex as, say, calendar smile position. Banks hate the word "prop," but the reality is most OTC market-making involves a lot of position taking... particularly now when spreads are extremely tight and liquidity is not deep.

    Jack: They’re all former investment bankers who were laid off from that economic crisis that Nancy Pelosi caused. They have zero real world skills, but God they work hard.
    -30 Rock

  • In reply to yeahright
    Revsly's picture

    yeahright:

    Any interest in leaving to do something else in the foreseeable future or are you in it for the long haul?

    Always a tough question. I love the markets, the intellectual challenge I find incredibly rewarding. I doubt I'd be willing to drop everything and do something else now. I would wager I am still trading in some form or fashion down the road.

    Jack: They’re all former investment bankers who were laid off from that economic crisis that Nancy Pelosi caused. They have zero real world skills, but God they work hard.
    -30 Rock

  • In reply to WallStreetBB
    Revsly's picture

    WallStreetBB:

    Do Banks still stop hunt traders?

    In what sense?

    Jack: They’re all former investment bankers who were laid off from that economic crisis that Nancy Pelosi caused. They have zero real world skills, but God they work hard.
    -30 Rock

  • In reply to Revsly
    WallStreetOasis.com's picture

    Revsly:

    WallStreetOasis.com:

    Thanks Revsly!

    I have a question: how much of your trading and posistions (rough estimate) would you say are just hedges for the rest of the banks exposure and/or what % of your trades are purely proprietary.

    In other words, are you working in concert with other desks or are you putting on your own prop trades...or both?

    Thanks

    Difficult to put a % to. Different people and different banks can handle this entirely differently. I tend to put on a position I want (core position) and trade around it. This might be something as simple as a "risk-on/risk-off" view, or as complex as, say, calendar smile position. Banks hate the word "prop," but the reality is most OTC market-making involves a lot of position taking... particularly now when spreads are extremely tight and liquidity is not deep.

    Thanks, that's interesting :-)

  • nubsauce's picture

    Awesome post!

    My question would be what do you find in your industry are the couple of best qualities to have for a potentital candidate, be it school, work experience, etc. Is it possible to "break" into a currency trader position without being recruited from undergrad or with prior trading history?

  • In reply to couchy
    Revsly's picture

    couchy:

    how much math do I need to know for you job? whats math did you study in college?

    On the options side, most of the math is understanding relationships (like partial derivatives). For example, what happens to your vega position as spot moves or what happens to your vega position as vol moves. It's rare you'll need to do any heavy calculations, athough from time to time it may be neccesarry if you are on a more structured desk. You also should be generally quick with numbers, otherwise you might miss some opportunities.

    Most of the math I studied was on the pure math side, though I did some statistics and applied math (on the PDE side mostly).

    Jack: They’re all former investment bankers who were laid off from that economic crisis that Nancy Pelosi caused. They have zero real world skills, but God they work hard.
    -30 Rock

  • RichardPennybags's picture

    What do you think are the top 3 things an intern could do to help you and others on your desk out? (Excluding lunch orders)

    Thanks

    "Every man should lose a battle in his youth, so he does not lose a war when he is old"

  • mbavsmfin's picture

    Awesome thread.

    1. Is there a reason you chose to work in London rather than NYC? I know London is the currenty trading capital of the world, but given how bad things are in Europe, do you have a desire to move to NYC in the near future?

    2. Long-term, are you trying to transition to a macro hedge fund? Have you thought about doing an MBA or mfin/mfe?

  • In reply to nubsauce
    Revsly's picture

    nubsauce:

    Awesome post!

    My question would be what do you find in your industry are the couple of best qualities to have for a potentital candidate, be it school, work experience, etc. Is it possible to "break" into a currency trader position without being recruited from undergrad or with prior trading history?

    Perhaps long in the past it would be possible to break in, but now it would be extremely difficult, particularly on the derivatives/options side.

    The 2 qualities I look for are this: 1) A genuine interest in understanding what's going on and more importantly 2) The ability to come up the curve quickly. There are a ton of REALLY smart people. Intelligence alone a good trader does not make. Personally I think the best traders pick up concepts quickly, and can apply a few things they know to problems/situations they've never seen before. This, in a way, makes it a bit impossible to prepare yourself... which makes it quite similar to the real world.

    Jack: They’re all former investment bankers who were laid off from that economic crisis that Nancy Pelosi caused. They have zero real world skills, but God they work hard.
    -30 Rock

  • In reply to Revsly
    Mps721's picture

    Revsly:

    Mps721:

    What would be your advice to a person wanted to start trading currencys. I have been trying to trade for the last 2 years but I have not had any luck, I find myself strategy hopping. Thank you.

    My advice to a retail trader is that it's extremely difficult. There is so much flow and positioning you miss. The day to day price action can bare very little resemblance to fundamentals. Probably more people are watching FX spot than any other market.

    Hmm... that's not really advice... ok if you insist on trading, it's going to be very difficult for you to day trade profitably, probably easier to take intermediate term views.


    I was just considering giving it up all together at this point, I havnt made a dime in the last 3 years and it this point I feel school is much more imporatant. Btw how is it that you trade? Do you have directions from your firm, or is it just mostly your own philosophy and the more profitable you are the more money you get to trade?

    Mps721

  • In reply to RichardPennybags
    Revsly's picture

    RichardPennybags:

    What do you think are the top 3 things an intern could do to help you and others on your desk out? (Excluding lunch orders)

    Thanks

    1. Get coffee (Hey... you said other than Lunch!)

    Seriously though, there is 1 thing in particular that you should understand and it is this:

    1. You will be generally useless to the trading desk. In fact, you'll most likely take up more resources than you'll ever hope to contribute.

    Have you accepted that yet? Ok great. Your internship is generally less about what you can do for a desk now, and more about what you can do for the desk in the future. I would be willing to bet most people who have done an internship or have been an analyst on a trading desk have experienced that feeling of helplessness. The thing is, for the most part your job is to soak up as much information as possible, ask good questions, and show you are interested in, and understand the concepts taught to you. No one expects you to (nor would enjoy you to) come in expecting to revolutionize the world.

    If you can help out with any administrative things, that's excellent (like PNL). But even then, most desks would probably not have you do that. There will surely be some BS tasks HR needs you to do to check off some box, but primarily this is a several week interview. So spend the time wisely.

    Jack: They’re all former investment bankers who were laid off from that economic crisis that Nancy Pelosi caused. They have zero real world skills, but God they work hard.
    -30 Rock

  • In reply to mbavsmfin
    Revsly's picture

    mbavsmfin:

    Awesome thread.

    1. Is there a reason you chose to work in London rather than NYC? I know London is the currenty trading capital of the world, but given how bad things are in Europe, do you have a desire to move to NYC in the near future?

    2. Long-term, are you trying to transition to a macro hedge fund? Have you thought about doing an MBA or mfin/mfe?

    1. Primarily because, as you said, London is the FX center of the world. "How bad things are in Europe" really has no impact on me sitting in London relative to NY or Singapore/HK/Tokyo. By the way, if you were to look at periphery spreads, things in Europe are PEACHY.

    2. Won't comment on the first part, but I will say in this job you find a wide range of people. Some like the MM side, it's stable (relatively of course), while others want to prove that they don't need flow to thrive. As far as MBA/MFin/MFE, never thought about it. It would be a waste of time if you have a good job in trading. They are most relevant if you are looking to transition to some other field (or from some other field into trading), and I'm not in that position.

    Jack: They’re all former investment bankers who were laid off from that economic crisis that Nancy Pelosi caused. They have zero real world skills, but God they work hard.
    -30 Rock

  • In reply to Mps721
    Revsly's picture

    Mps721:

    Revsly:
    Mps721:

    What would be your advice to a person wanted to start trading currencys. I have been trying to trade for the last 2 years but I have not had any luck, I find myself strategy hopping. Thank you.

    My advice to a retail trader is that it's extremely difficult. There is so much flow and positioning you miss. The day to day price action can bare very little resemblance to fundamentals. Probably more people are watching FX spot than any other market.

    Hmm... that's not really advice... ok if you insist on trading, it's going to be very difficult for you to day trade profitably, probably easier to take intermediate term views.

    I was just considering giving it up all together at this point, I havnt made a dime in the last 3 years and it this point I feel school is much more imporatant. Btw how is it that you trade? Do you have directions from your firm, or is it just mostly your own philosophy and the more profitable you are the more money you get to trade?

    It's rare that the firm gives directions unless they are really worried about a position. It's not uncommon that I could have a different core view than the Spot/Forwards/Rates desks (or some individual within). Hell, I could have a different view than someone on my desk. It sort of comes with the territory, that's why we have a market!

    Jack: They’re all former investment bankers who were laid off from that economic crisis that Nancy Pelosi caused. They have zero real world skills, but God they work hard.
    -30 Rock

  • In reply to Revsly
    RichardPennybags's picture

    Revsly:

    RichardPennybags:

    What do you think are the top 3 things an intern could do to help you and others on your desk out? (Excluding lunch orders)

    Thanks

    1. Get coffee (Hey... you said other than Lunch!)

    Seriously though, there is 1 thing in particular that you should understand and it is this:

    ...

    Thanks for a quick reply!

    Another quick question: how important is the firm's strength in an asset class for junior analysts within S&T?

    And how much of a difference would you say there really is between a 'top tier' BB and 'lower tier' BB, again, for a particular area?

    "Every man should lose a battle in his youth, so he does not lose a war when he is old"

  • watersign's picture

    Im surprised more people here aren't into trading currency as they are ideal for speculating purposes...does the infrastructure your bank provide you give you a big edge over a retail trader? I mean obviously, it does..but if you were to take 10,000 quid and trade it from your personal account, how do you think you'd fair?

    alpha currency trader wanna-be

  • In reply to RichardPennybags
    Revsly's picture

    RichardPennybags:

    Revsly:
    RichardPennybags:

    What do you think are the top 3 things an intern could do to help you and others on your desk out? (Excluding lunch orders)

    Thanks

    1. Get coffee (Hey... you said other than Lunch!)

    Seriously though, there is 1 thing in particular that you should understand and it is this:

    ...

    Thanks for a quick reply!

    Another quick question: how important is the firm's strength in an asset class for junior analysts within S&T?

    And how much of a difference would you say there really is between a 'top tier' BB and 'lower tier' BB, again, for a particular area?

    Generally, you won't know what product you're going to be doing when you're going to be an intern, so it's nearly impossible. Even then, being part of the "top desk" is sort of meaningless as a junior. It would kind of suck to be on the best desk doing nothing but details, if your peers are managing their own books.

    Jack: They’re all former investment bankers who were laid off from that economic crisis that Nancy Pelosi caused. They have zero real world skills, but God they work hard.
    -30 Rock

  • In reply to watersign
    Revsly's picture

    watersign:

    Im surprised more people here aren't into trading currency as they are ideal for speculating purposes...does the infrastructure your bank provide you give you a big edge over a retail trader? I mean obviously, it does..but if you were to take 10,000 quid and trade it from your personal account, how do you think you'd fair?

    I would love to say I'd kill it, but who knows. I've made money in the past, but could've just been lucky.

    You have so much of an advantage you don't even know. You have an idea of where stops/tps are in the market, where large barriers/strikes are (all of which can actually drive price action... tail wagging dog style), see when big customers are putting on/stopping out of positions, have an idea when some px action might be due to some fix or corporate/M&A hedging. Even with all of this info, it's still difficult to monetise FX spot, and that's saying something.

    Jack: They’re all former investment bankers who were laid off from that economic crisis that Nancy Pelosi caused. They have zero real world skills, but God they work hard.
    -30 Rock

  • Bonus's picture

    SB if I could.. Not that I am particularly interested in trading (I don't think I fit well in this line of business) I was wondering;

    What are the hours like? I guess it's not purely market-hour since it's FX. Are there even night shifts?
    How intensive or not intensive can a day be?

    Cheers!

    Colourful TV, colourless Life.

  • In reply to Revsly
    Mps721's picture

    Revsly:

    Mps721:
    Revsly:
    Mps721:

    What would be your advice to a person wanted to start trading currencys. I have been trying to trade for the last 2 years but I have not had any luck, I find myself strategy hopping. Thank you.

    My advice to a retail trader is that it's extremely difficult. There is so much flow and positioning you miss. The day to day price action can bare very little resemblance to fundamentals. Probably more people are watching FX spot than any other market.

    Hmm... that's not really advice... ok if you insist on trading, it's going to be very difficult for you to day trade profitably, probably easier to take intermediate term views.

    I was just considering giving it up all together at this point, I havnt made a dime in the last 3 years and it this point I feel school is much more imporatant. Btw how is it that you trade? Do you have directions from your firm, or is it just mostly your own philosophy and the more profitable you are the more money you get to trade?

    It's rare that the firm gives directions unless they are really worried about a position. It's not uncommon that I could have a different core view than the Spot/Forwards/Rates desks (or some individual within). Hell, I could have a different view than someone on my desk. It sort of comes with the territory, that's why we have a market!


    So what happens if you have a position on and you lose a few hundred thousand, does that come out of your compensation? Forgive me but I feel like concept of trading at a desk or prop trading is more like gambling than anything.

    Mps721

  • In reply to Bonus
    Revsly's picture

    Bonus:

    SB if I could.. Not that I am particularly interested in trading (I don't think I fit well in this line of business) I was wondering;

    What are the hours like? I guess it's not purely market-hour since it's FX. Are there even night shifts?
    How intensive or not intensive can a day be?

    Cheers!

    We work closely with NY and Asia, so my hours are pretty normal. Generally 6:45-5:30. Not too bad at all.

    Recently days have been dull as all hell, won't be uncommon to see people just browsing the web or finding ways to waste time. There have been days when I've been so busy and PNL has been so volatile that I haven't had time to get lunch. It can be incredibly unpredictable, which keeps it fresh in the long-run.

    Jack: They’re all former investment bankers who were laid off from that economic crisis that Nancy Pelosi caused. They have zero real world skills, but God they work hard.
    -30 Rock

  • In reply to Mps721
    Revsly's picture

    Mps721:

    Revsly:
    Mps721:
    Revsly:
    Mps721:

    What would be your advice to a person wanted to start trading currencys. I have been trying to trade for the last 2 years but I have not had any luck, I find myself strategy hopping. Thank you.

    My advice to a retail trader is that it's extremely difficult. There is so much flow and positioning you miss. The day to day price action can bare very little resemblance to fundamentals. Probably more people are watching FX spot than any other market.

    Hmm... that's not really advice... ok if you insist on trading, it's going to be very difficult for you to day trade profitably, probably easier to take intermediate term views.

    I was just considering giving it up all together at this point, I havnt made a dime in the last 3 years and it this point I feel school is much more imporatant. Btw how is it that you trade? Do you have directions from your firm, or is it just mostly your own philosophy and the more profitable you are the more money you get to trade?

    It's rare that the firm gives directions unless they are really worried about a position. It's not uncommon that I could have a different core view than the Spot/Forwards/Rates desks (or some individual within). Hell, I could have a different view than someone on my desk. It sort of comes with the territory, that's why we have a market!

    So what happens if you have a position on and you lose a few hundred thousand, does that come out of your compensation? Forgive me but I feel like concept of trading at a desk or prop trading is more like gambling than anything.

    A few hundred thousand probably isn't really going to matter, a few bux might well do, especially if you're not up on the year. If you're not producing, you might get no compensation or be fired, simple as that. These days, banks usually have some clawback clause too, which could allow them to reclaim prior compensation if performance is exceptionally poor.

    Jack: They’re all former investment bankers who were laid off from that economic crisis that Nancy Pelosi caused. They have zero real world skills, but God they work hard.
    -30 Rock

  • In reply to Revsly
    prospie's picture

    Revsly:

    WallStreetOasis.com:

    Thanks Revsly!

    I have a question: how much of your trading and posistions (rough estimate) would you say are just hedges for the rest of the banks exposure and/or what % of your trades are purely proprietary.

    In other words, are you working in concert with other desks or are you putting on your own prop trades...or both?

    Thanks

    Difficult to put a % to. Different people and different banks can handle this entirely differently.


    Actually, this makes me wonder. if you are told to take on positions so that some completely different division/group elsewhere in the bank is hedged better, even though it's a trade that you would avoid usually, then this would be classified totally outside your normal P&L for purposes of determining your bonus, right?

  • In reply to Revsly
    watersign's picture

    Revsly:

    watersign:

    Im surprised more people here aren't into trading currency as they are ideal for speculating purposes...does the infrastructure your bank provide you give you a big edge over a retail trader? I mean obviously, it does..but if you were to take 10,000 quid and trade it from your personal account, how do you think you'd fair?

    I would love to say I'd kill it, but who knows. I've made money in the past, but could've just been lucky.

    You have so much of an advantage you don't even know. You have an idea of where stops/tps are in the market, where large barriers/strikes are (all of which can actually drive price action... tail wagging dog style), see when big customers are putting on/stopping out of positions, have an idea when some px action might be due to some fix or corporate/M&A hedging. Even with all of this info, it's still difficult to monetise FX spot, and that's saying something.

    Thanks for answering.

    So, what happens if someone off the street with no formal education walks in but has a killer track record trading their own FX account, granted its large enough. I really love trading forex and would love to one day work at a hedge fund, particularly one that trades currency/commodities specifically. I know it's super tough but making a winning trade is a fucking awesome feeling. What you say about instant gratification and knowing how you're doing immediately is why I want to be a trader....after working my last job as a data analyst at a marketing firm, it pains me to think about getting another boring office job where I spend 2/3 of my time looking busy instead of actually providing value and or making money. Thanks for doing this AMA, we don't see too many people here into foreign exchange as everyone here is hell bent on going to business school (which is a huge waste of time) and "exit opps"

    Good traders don't need exit ops, they make their own :)

    alpha currency trader wanna-be

  • In reply to prospie
    Revsly's picture

    prospie:

    Revsly:
    WallStreetOasis.com:

    Thanks Revsly!

    I have a question: how much of your trading and posistions (rough estimate) would you say are just hedges for the rest of the banks exposure and/or what % of your trades are purely proprietary.

    In other words, are you working in concert with other desks or are you putting on your own prop trades...or both?

    Thanks

    Difficult to put a % to. Different people and different banks can handle this entirely differently.

    Actually, this makes me wonder. if you are told to take on positions so that some completely different division/group elsewhere in the bank is hedged better, even though it's a trade that you would avoid usually, then this would be classified totally outside your normal P&L for purposes of determining your bonus, right?

    In this case it would normally be done in 1 of 2 ways most-likely:

    1. The desk which needs to be "hedged" buys protection directly from my desk.
    2. It is put into some sort of Management account which is the form that Mgmt expresses hedges to overall business model/positions.

    Jack: They’re all former investment bankers who were laid off from that economic crisis that Nancy Pelosi caused. They have zero real world skills, but God they work hard.
    -30 Rock

  • Special K's picture

    Thanks for the awesome thread!

    What's your take on the Yen?
    What sources do you use for your macro news?
    I'm the synthetic portfolio manager for my school's investment group and I've taken an acute interest in currency recently. What would you recommend I do/read to learn more about the currency market? Any inputs on how I can blend currency futures into the portfolio?

    Thanks!

  • In reply to watersign
    Revsly's picture

    watersign:

    Revsly:
    watersign:

    Im surprised more people here aren't into trading currency as they are ideal for speculating purposes...does the infrastructure your bank provide you give you a big edge over a retail trader? I mean obviously, it does..but if you were to take 10,000 quid and trade it from your personal account, how do you think you'd fair?

    I would love to say I'd kill it, but who knows. I've made money in the past, but could've just been lucky.

    You have so much of an advantage you don't even know. You have an idea of where stops/tps are in the market, where large barriers/strikes are (all of which can actually drive price action... tail wagging dog style), see when big customers are putting on/stopping out of positions, have an idea when some px action might be due to some fix or corporate/M&A hedging. Even with all of this info, it's still difficult to monetise FX spot, and that's saying something.

    Thanks for answering.

    So, what happens if someone off the street with no formal education walks in but has a killer track record trading their own FX account, granted its large enough. I really love trading forex and would love to one day work at a hedge fund, particularly one that trades currency/commodities specifically. I know it's super tough but making a winning trade is a fucking awesome feeling. What you say about instant gratification and knowing how you're doing immediately is why I want to be a trader....after working my last job as a data analyst at a marketing firm, it pains me to think about getting another boring office job where I spend 2/3 of my time looking busy instead of actually providing value and or making money. Thanks for doing this AMA, we don't see too many people here into foreign exchange as everyone here is hell bent on going to business school (which is a huge waste of time) and "exit opps"

    Good traders don't need exit ops, they make their own :)

    Usually those types of people might be able to get a role at a proprietary firm, and if they continue the success can build up rapport in a larger scale. Not common to have a guy PA trading come into a bank job.

    Jack: They’re all former investment bankers who were laid off from that economic crisis that Nancy Pelosi caused. They have zero real world skills, but God they work hard.
    -30 Rock

  • In reply to Special K
    Revsly's picture

    Special K:

    Thanks for the awesome thread!

    What's your take on the Yen?
    What sources do you use for your macro news?
    I'm the synthetic portfolio manager for my school's investment group and I've taken an acute interest in currency recently. What would you recommend I do/read to learn more about the currency market? Any inputs on how I can blend currency futures into the portfolio?

    Thanks!

    I can't/won't really get into specific views I have unfortunately.

    Sources wise, BBG I get a lot, I read WSJ, Economist, research, then assorted other things (like Bill Gross' letter, stuff like that).

    Currency and Rates are purest macro products in Finance, easiest way to express that core view. From an investment side, thinking about carry/interest rates and which economies will outperform will be a starting point, but then you have to blend that with the "is this priced in?" side. It's not easy... if it were, we'd all be out of a job.

    You might find benefit in having currencies in the portfolio as they could be largely uncorrelated with many of the assets you are holding. (Though keep in mind correlations, for example something like AUDUSD will generally be correlated with, say S&P 500 and other equities)

    Jack: They’re all former investment bankers who were laid off from that economic crisis that Nancy Pelosi caused. They have zero real world skills, but God they work hard.
    -30 Rock

  • G Spread's picture

    How can I learn forex (beyond the basics, which I know)? Are there any books/websites/something else you would recommend? I'm especially interested in being able to analyze pairs from a macro standpoint. And what are your views on USD/GBP? Just wondering..
    Thanks for doing this, I appreciate it.

  • total's picture

    How important was the Hull book you sold me to getting this job and to the usefulness to your job? Did you intern in the US and then go full-time to the UK? How much will you pay me not to post your linkedin picture? (just kidding on that last one, thanks for doing this)

  • tap's picture

    What did you have for breakfast? ;)

    Seriously, though, do you get a lot of freelance work or are you on a salary? Both?

  • watersign's picture

    Do you guys get a discount on spreads? When i trade currency pairs I usually try to trade the pairs that are in session (Sterling/Dollar Sterling/Yen) for example during the London session as the spreads lower substantially as liquidity obviously is greater. I trade using Oanda and have been looking at uncommon crosses such as the GPB/PLN or the ZAR/JPY and the spreads on these pairs are super high!

    Also, does your banks software have all types of crazy indicators that us retails guys don't have? Does IT help you design/implement indicators? I don't usually don't use indicators as I primarily use trend lines and S/R lines but have been toying with using SMA,EMA,WMA to show where support/resistance may or may not be. I'm a firm believer in price action trading :)

    Also, does your banks quant/algo desk trade currency pairs? It seems like the quant/algo guys focus primarily on equities/derivatives, forgive me for my ignorance as i dont work in finance

    alpha currency trader wanna-be

  • In reply to total
    Revsly's picture

    total:

    How important was the Hull book you sold me to getting this job and to the usefulness to your job? Did you intern in the US and then go full-time to the UK? How much will you pay me not to post your linkedin picture? (just kidding on that last one, thanks for doing this)

    Haha, I entirely forgot about that! It was quite useful for me, but it's what you make of it. If you mention in an interview/on your resume that you are familiar with options theory, you're opening yourself up to a ton of questions. If you do well it will reflect positively... if not, well you just sort of look like a pretender.

    I interned in the US and went Full-Time UK, correct.

    Jack: They’re all former investment bankers who were laid off from that economic crisis that Nancy Pelosi caused. They have zero real world skills, but God they work hard.
    -30 Rock

  • In reply to watersign
    Revsly's picture

    watersign:

    Do you guys get a discount on spreads? When i trade currency pairs I usually try to trade the pairs that are in session (Sterling/Dollar Sterling/Yen) for example during the London session as the spreads lower substantially as liquidity obviously is greater. I trade using Oanda and have been looking at uncommon crosses such as the GPB/PLN or the ZAR/JPY and the spreads on these pairs are super high!

    Also, does your banks software have all types of crazy indicators that us retails guys don't have? Does IT help you design/implement indicators? I don't usually don't use indicators as I primarily use trend lines and S/R lines but have been toying with using SMA,EMA,WMA to show where support/resistance may or may not be. I'm a firm believer in price action trading :)

    Also, does your banks quant/algo desk trade currency pairs? It seems like the quant/algo guys focus primarily on equities/derivatives, forgive me for my ignorance as i dont work in finance

    It's not a discount on spreads... we have direct access to the market via platforms like Reuters, EBS, etc (well I don't on the options desk, but my spot desk does who I'll generally trade through). Otherwise, we have software which has algorithms to most efficiently trade rates, especially the crosses. The reason something like GBP/PLN is so wide as it's the cross of two individual pairs (EURGBP and EURPLN). Ie if you want to immediately deal GBPPLN, you have to cross 2 B/A spreads.

    I don't really use technicals other than looking at support/resistance and maybe RSI on occasion. I'm sure many people do tho.

    Jack: They’re all former investment bankers who were laid off from that economic crisis that Nancy Pelosi caused. They have zero real world skills, but God they work hard.
    -30 Rock

  • In reply to tap
    Revsly's picture

    tap:

    What did you have for breakfast? ;)

    Seriously, though, do you get a lot of freelance work or are you on a salary? Both?

    Sausage on a roll, tho normally I skip breakfast.

    I work for a bank, so have a salary similar to those in Investment Banking.

    Jack: They’re all former investment bankers who were laid off from that economic crisis that Nancy Pelosi caused. They have zero real world skills, but God they work hard.
    -30 Rock

  • In reply to G Spread
    Revsly's picture

    Firefox:

    How can I learn forex (beyond the basics, which I know)? Are there any books/websites/something else you would recommend? I'm especially interested in being able to analyze pairs from a macro standpoint. And what are your views on USD/GBP? Just wondering..
    Thanks for doing this, I appreciate it.

    I don't really have anything in particular unfortunately. People take views in all different ways on the macro side, could be current-account related or IR related, the world is your oyster. None of them are necessarily right or wrong, it's just like trying to value a company; if you really want you can likely find data to support your thesis. Whether or not that thesis is correct is an entirely separate matter.

    Jack: They’re all former investment bankers who were laid off from that economic crisis that Nancy Pelosi caused. They have zero real world skills, but God they work hard.
    -30 Rock

  • pudding's picture

    Thank you so much for answering our questions! I really appreciate it! So I have become extremely interested in currency markets as of late and have begun to try to learn all I can. Is there anywhere you would direct a novice investor in currency markets to learn as much as they can? Or gives a few of your best tips? I'm starting to attempt to put together 6 month to year long fundamental views on the markets (not saying they are near correct, but just for a learning experience) to see what I can come up with based on the government provided macro data. (not attempting to invest on it until I understand more). Would you say this is a good place to begin? I'm assuming the bank relies on its own models which I am not sure how to even begin creating yet, but any advice on deciding which economies will outperform? Is the government data good to use and analyze or do you feel, for instance, the bank ends up having much better numbers?

  • snipez's picture

    What are your thoughts on Rates/FX street research? I've heard it's common advice never to trade based on someone else's idea, but did you use street research to move up the curve? Thanks.

  • nontarget kid's picture

    Very interesting so far. Thanks for doing this. From your total volume of options trades, what percent are vanilla and what percent are exotic? From what I understand, each guy on a spot FX desk trades a specific pair. On the FX options desk, do you trade all kinds of options (vanilla and exotic) on a specific pair or do you trade one specific product (digitals, barriers, etc.) on many different pairs? Or is it a mix of both? Also, what's your take on Taleb's Dynamic Hedging compared to Hull and Natenberg? Last question, how much did you actually "know" when you started your internship versus what you learned on the job?

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