FI Traders > Equity Traders?
The Big Short, what an awesome book that was! It gave insights into the crash that I have never realized before, and would have never came to learn in school either. The book informed me that equity traders are looked down upon compared to fixed income traders, according to the author. The author explained of the massive size and volume of fixed income markets compared to equity markets. He also explained of the larger spreads and ability for fixed income to be bundled into the new (and largely misunderstood) pools of debt obligations.
So where does the belief that equity traders are less than fixed income traders stem from? Are fixed income traders truly greater than equity traders? Do they have higher incomes perhaps?
I have no experience or opinion on the topic, just curiousity.






Didn't you just answer your
Didn't you just answer your own question?
What do you mean by "truly
What do you mean by "truly greater"?
there's a lot more moving
there's a lot more moving wheels in the fixed income world then equity world....fx/swaps/rates...they all go into a given trade
Markov: Didn't you just
Didn't you just answer your own question?
I have no experience in trading. Was trying to get insight from experienced people to see where this belief comes from and the reasoning behind it.
What do you mean by "truly greater"?
Do fixed income traders feel as if they are superior to equity traders?
jrtr8der: there's a lot more
there's a lot more moving wheels in the fixed income world then equity world....fx/swaps/rates...they all go into a given trade
That makes sense. How about the compensation side? Are fixed income trading positions more difficult to obtain?
fixed income trading higher
fixed income trading higher paid, for most part...and bond market much larger than equities markets
lostchimp: jrtr8der: there'
there's a lot more moving wheels in the fixed income world then equity world....fx/swaps/rates...they all go into a given trade
That makes sense. How about the compensation side? Are fixed income trading positions more difficult to obtain?
I'd say there are more opportunities in FI compared to EQ. It is a bigger market and a lot of equities are being automated by computers
Bobb: lostchimp: jrtr8der
there's a lot more moving wheels in the fixed income world then equity world....fx/swaps/rates...they all go into a given trade
That makes sense. How about the compensation side? Are fixed income trading positions more difficult to obtain?
I'd say there are more opportunities in FI compared to EQ. It is a bigger market and a lot of equities are being automated by computers
Fixed income is also going the way of computers....
I'm a fixed income trader and
I'm a fixed income trader and yeah I feel superior to equity traders.
I think FI is just more interesting. More moving parts, everything is less clear, lots of room for analysis, you can try to develop an edge. Also can be more structured/leveraged.
mxc: I'm a fixed income
I'm a fixed income trader and yeah I feel superior to equity traders.
I think FI is just more interesting. More moving parts, everything is less clear, lots of room for analysis, you can try to develop an edge. Also can be more structured/leveraged.
Haha thanks
I was actually worried that
I was actually worried that the thread referred to someone trying to transition from FI to equities.
I also don't believe FI is going the way of the computers. Sure, spot FX, govies, vanilla swaps, we have automated market makers. But the rest is just too bespoke
jrtr8der: Bobb: lostchimp
there's a lot more moving wheels in the fixed income world then equity world....fx/swaps/rates...they all go into a given trade
That makes sense. How about the compensation side? Are fixed income trading positions more difficult to obtain?
I'd say there are more opportunities in FI compared to EQ. It is a bigger market and a lot of equities are being automated by computers
Fixed income is also going the way of computers....
Yes and no. There are some products that are more automated as said above. The corp bond market is becoming more electronic as well other prouducts are just to complex at the moment
Bobb: jrtr8der: Bobb: l
there's a lot more moving wheels in the fixed income world then equity world....fx/swaps/rates...they all go into a given trade
That makes sense. How about the compensation side? Are fixed income trading positions more difficult to obtain?
I'd say there are more opportunities in FI compared to EQ. It is a bigger market and a lot of equities are being automated by computers
Fixed income is also going the way of computers....
Yes and no. There are some products that are more automated as said above. The corp bond market is becoming more electronic as well other prouducts are just to complex at the moment
Unless we're talking esoteric swaps and other OTC products, every fixed income instrument has machines in it, whether market-making, or just trying to catch the bid/offer before the big dumb money that comes in and starts taking levels with no regard to getting the best fill.
Defintely more opportunities in FI (might as well label it FICC) trading than equities. Eq traders are considered the dumbest guys in the room since credit/bonds always lead stocks (more an axiom than empirically tested, but i digress..) and we FI traders have way more variables to look at when deciding upon a trade than simply this single company's cash flows.
I've oversimplified, but perhaps that's fitting to such a question.
Let me add to what I said The
Let me add to what I said
The only link between stock A and stock B will be a form of correlation, whereas in fixed income you typically have a relationship like product A = product B + basis.
E.g:
German 10y = rates + asset swap spread
Spain 10y = German 10y + spread
Bund repo = Eonia + GC spread
Cross-currency swap = FX forward + 2x vanilla IRS
Corporate bond = CDS + CDS basis => bond - CDS = basis package = funding
etc.
One thing I can think of in equity that is fixed income-sy is index arb, where you trade the future vs. underlyers and get long/short the funding...
I guess equity vol is more interesting though
mxc: One thing I can think of
One thing I can think of in equity that is fixed income-sy is index arb, where you trade the future vs. underlyers and get long/short the funding...
Yes, i.e. delta-one desks and all the equity finance and index arb in between. While equity derv's are interesting, i still wouldnt classify them as being anywhere near FI.
A lot of the posts in this
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You have binary payoffs in
mxc: You have binary payoffs
S&T Careers - The only trading interview guide you will ever need
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derivstrading: mxc: You
and generally these more
derivstrading hit the nail on
CNBC sucks
"This financial crisis is worse than a divorce. I've lost all my money, but the wife is still here." - Client after getting blown up
No, I've never run a vol book
Keep in mind who the author
"A man generally has two reasons for doing anything. One that sounds good, and the real one." - J.P. Morgan
Dp
"A man generally has two reasons for doing anything. One that sounds good, and the real one." - J.P. Morgan
BTbanker: Keep in mind who
mxc: You have binary payoffs
on wall st. its all about how
mxc: No, I've never run a vol
S&T Careers - The only trading interview guide you will ever need
If you have any questions email them to me at [email protected]
FI mostly trades OTC hence
See my WSO blog
lostchimp: Do fixed income
See my WSO blog
jrtr8der: Bobb: lostchimp
See my WSO blog
mxc: I'm a fixed income
See my WSO blog
derivstrading: mxc: You
See my WSO blog
derivstrading: mxc: You
See my WSO blog
larasing: lostchimp: Do
S&T Careers - The only trading interview guide you will ever need
If you have any questions email them to me at [email protected]