Q&A: 1st year BB London Rates Trader Taking Your Questions
Hi everyone!
Some of you may remember me, I stopped posting on this forum about a year ago because I got tired of the site for a number of reasons and it wasn't worth it for me anymore. However I'm a big believer of giving back, and I did learn a lot from this site and from a few of the users, so I thought someone might be interested in this, especially since most of the info here seems to target IBD and NYC/US, so hopefully I can give someone a hand.
My background: I was born and raised in continental Europe, studied there at one of the big targets, although I had terrible grades, so it wasn't easy breaking in. Did 2 internships in BBs in S&T in London and right now I'm in the Rates Trading desk at one of them. Love the product, love the people so extremely happy with my job.
Any questions I can answer on any topic like recruiting, interviewing, my job, trading desks, etc.. I'm happy to answer. Having done 2 internships at BB I have met a lot of people who are now junior analysts at different firms, so I have a fairly good understanding of how the different internships and grad programs work if anyone has any questions as well.
If anyone has smth a bit more personal feel free to PM me as well, I WILL POST THE PM without your name on it, so no one can match the personal info with the user, but the goal of this is to benefit as many people as possible.
Thank you Maximus for doing
Thank you Maximus for doing this
WSO's COO (Chief Operating Orangutan) | My story | Connect with me on Linkedin.
2013 WSO Conference
Thanks for doing this! What
Thanks for doing this!
What are your top 3 tips for assessment centres? How do you stand out in a group of 20 people who are just as good on paper and have read the same guides as you?
"Every man should lose a battle in his youth, so he does not lose a war when he is old"
Hi, I have a few basic
Hi,
I have a few basic questions.
Why did you choose rates/what do you like about it?
What degree did you do?
What do you think of your job security?
Do people who don't speak an
Do people who don't speak an EU language stand a chance? (please reply honestly!)
Why are 90%+ of people who get into the program (summer or otherwise) Caucasian (either british or European or Chinese-Asian) year on year? Do coloured people not apply?
Is diversity in the workplace a lie or do banks actually take it seriously?
Does a coloured person stand a smaller chance (or no chance)? (on linkedin the coloured people tend to have stronger profiles before they land an offer vs caucasian people - in general - from what ive seen).
In terms of 'personality' fit - what if you play sports/hit the gym, play an instrument etc but are not 'great' at it - do you stand a 0 chance of landing an offer as a coloured person? (I know many people who are not the 'best' at anything and get a 2:1 in a UK degree and still land offers so I'm wondering if the entry bar is different for different people).
Day in a life :) ? Also,
Day in a life :) ?
Also, what's your interaction with Sales and Structuring like and what's your take on your job and their's (like it / hate it etc)?
RichardPennybags: Thanks for
Thanks for doing this!
What are your top 3 tips for assessment centres? How do you stand out in a group of 20 people who are just as good on paper and have read the same guides as you?
I have been to 5+ assessment centres and always got an offer, so hopefully I'm doing something right. Honestly I think narrowing it down to 3 is pretty much impossible, so I'll write a long post based on personal tips and things and mistakes I hear from people at my desk.
Each bank does a quite different assessment centre, so I'll divide this based on the different activities you'll have to do.
Trading game
Generally this will be done in groups. There are turns. Each turn a group makes a market and the others buy/sell from them. In each turn more information is revealed so you can adjust your position and prices.
- Who wins or loses is of no importance. It does have a strong luck component. Make sure you do the right things and you will be in the clear.
- Make sure your group ALWAYS knows EXACTLY what your positions are and what your PnL is. If the others don't listen to you and you have to do it yourself and not interact much with the market making process do it anyway. You will be asked this and it looks extremely bad if you say something like your PnL is $400 when it's actually $12. And this happens much more often than you would think. People just focus on whether they are long or short and whether they want to be longer shorter. Your exact position matters a lot (see next point)
- Don't take ridiculous risks. This is a serious game to assess your abilities for a market making desk at a bank. Our job is not to take a punt and see if we are right. If you decide to always buy in lots as big as you can and think something like "I'll either be first or last" people won't appreciate it. It's fine to cut losses and change your mind. It's fine to trade small lots if you are unsure. Risk management is key.
- Write down what the other people are buying and selling. At any point in time you should be able to tell what the exact positions of the rest are. This will help a lot when you have to make a market.
- Pay attention to the details. Try to avoid things like trying to buy at the dealers bid price.
- Don't behave like an asshole. Yes, you need a type A personality, but if you keep bulldozing your ideas through, being pushy and not listening to anyone you will be dinged. You need to show you have the perfect balance between putting your ideas forward and being flexible and able to recognize when other people have better ones or are just not willing to go along. Make sure when you disagree you say it though.
- Don't try to push the market. There's always the team that makes a ridiculously high market because they are long. It doesn't work and it will make you look like an idiot.
Group Dynamic + Presentation
This will mean something like having to pick an investment or two among 8 or 10 for an investor profile and then present it to the people watching.
- There's not a right answer. Never. All of them have pros and cons. Don't be adamant about having to go with one. Make sure you are the one to always point out the merits and disadvantages of every one of them and keep an open mind. The key here is to pick something quickly (doesn't really matter what) so you can prepare the pitch in depth and address all the problems of the product and find a way of "beautifying" them since you can pretty much predict the questions you'll get. They WILL ask you and they WILL be very hard on you. If you do the pitch in 3 minutes and don't think of a way of answering the questions you'll be fucked. You can openly say it, like "Guys, I believe there is no right answer here, so I believe we should choose something quickly and focus on making a good pitch"
- The "don't behave like an asshole" point from above becomes even more important. Watch your body language, the way you talk to people, the volume of your voice, your face when someone else is talking. Always have a respectful smile and look relaxed.
- Only talk when you have something to say. Don't be the guy who sits in the corner and says nothing, but don't be the guy who keeps on talking without adding anything useful. Again, balance is key.
- Write things down and manage the time. This will make you look like you are in charge. You'll be the one to say "So we have agreed on X", "There's 6 of us vs 2 who agree on Y", "The remaining questions to answer are Z" "We have been talking about this 2 minutes over our time and we still need to discuss alternative A so let's make a decision".
- When presenting make sure you always go first or second and you exactly stick to your time. You will generally have a very short time, something like 3 minutes for 6 people to speak, so everyone gets 30 secs. People will always go a bit above their time and there will always be an asshole who talks for like 1 minute. If you are the last one you won't be able to speak, which means the people who talked too much will look bad and the ones who didn't talk will miss a chance for shining.
- Avoid being in a conflict at all costs. There will likely be one, profit from it. Instead of being the one involved be the one who acts as a referee, proposes compromise and solutions.
Individual Presentation
You are given market info and research and you have to propose a trade idea.
- Some people try to make very long presentations to get fewer questions. I think you should do the opposite. Keep it as short as possible, no matter how much time they give you, even if part of that time goes to questions. The more you say the more likely it is you'll say something stupid or you'll say something that will give them a chance to poke a hole in your thesis. Be brief and then answer their questions the best you can.
- Be flexible. If someone asks a question that basically sinks your idea it's OK, just propose a solution, say something like "You are right, however that could be solved hedging/buying/ XYZ in addition to the original proposal"
- Remember general presenting rules like voice inflection, volume, hand moves, etc... Don't forget everything just because you are nervous.
Interviews
General rules still apply, there is plenty of advice on the site, but I would like to add one thing. If it is a program where they make desk specific offers you still will be interviewed by all the desks with spots. Make sure you perform in all of them! Many people just focus on the one they really like. Yes, you need the desk you like to pick you specifically, but you also need good reviews from everybody else because they all talk about all the candidates. So if 3 EDs from other desks didn't like you, you won't get a job no matter how much your perfect desk loved you. This doesn't mean you have to tell each of them their desk is your first choice either, you'll be fucked if you do that too. However say something nice about all of them and say you are open (you can't really be picky in this market) If you want to do sales and it's a structuring desk say something like "I have always wanted to do sales because of.... but I think I would also be open to a structuring desk because I would be able to do longer-term projects, go really in depth into products and develop my technical knowledge, and I would still be able to see clients and participate in the sales process".
JWick: Hi, I have a few basic
Hi,
I have a few basic questions.
Why did you choose rates/what do you like about it?
What degree did you do?
What do you think of your job security?
1.- I've always been a Macro guy. Corporate finance, company results, sector reports and that kind of thing bores me to death to be honest. On the other hand, politics, economics, money flows, trading balances, monetary policies, inflation and that kind of thing has always been very interesting for me. I also like the fact that pretty much any news affects my day, everything is related and has an impact on rates markets. Apart from that, there was a luck component, I was placed in a Rates desk on my first internship and that has always made it easier for me I guess.
2.- I have a Masters Degree in Engineering.
3.- I actually think it's pretty good. My desk is quite top heavy and small after firing some people. So there are basically MDs, EDs, 1 VP and me. This means I have a lot of work, a lot of grunt work, but I'm also fairly valuable and cheap. If they want to fire someone they will probably go for the expensive people, although I think that this ones have stayed because they are pretty damn good.
Charles-perry: Do people who
Do people who don't speak an EU language stand a chance? (please reply honestly!)
Why are 90%+ of people who get into the program (summer or otherwise) Caucasian (either british or European or Chinese-Asian) year on year? Do coloured people not apply?
Is diversity in the workplace a lie or do banks actually take it seriously?
Does a coloured person stand a smaller chance (or no chance)? (on linkedin the coloured people tend to have stronger profiles before they land an offer vs caucasian people - in general - from what ive seen).
In terms of 'personality' fit - what if you play sports/hit the gym, play an instrument etc but are not 'great' at it - do you stand a 0 chance of landing an offer as a coloured person? (I know many people who are not the 'best' at anything and get a 2:1 in a UK degree and still land offers so I'm wondering if the entry bar is different for different people).
1.- Yes. In a trading desk languages are completely unnecessary. Yes, if we have to speak to a particular client/salesperson/broker that is from one of our home countries people will revert to their mother tongue, but for example I use my mother tongue like once a month. Structuring is pretty much the same (besides they are pretty much all Indian, Asian or French, so no real EU language skills) For sales jobs they are useful. Sales desks are divided by type of clients (HF sales, Central Bank sales, Real Money Clients...) and regions based on languages (Iberia, Germanics, Italy, Russia, etc...). If you speak the language you can obviously be eligible for more desks in the regional coverage so it's easier. However they all basically take natives.
2.- That's quite a mix you are making. Chinese people are not caucasian bro. Not even close to 90% of the people were caucasian at any of the 2 internships I've been in or in my graduate program. Same thing for my 3 flatmates colleagues. There are a lot of Asian, Indian, Arabs, South Americans, North Africans and black people. There are many white people as well who are from places like the middle east, eastern europe, russia, south america... The way I see it that's pretty diverse, even if they are white. It's true that Indian and black people tend to be UK educated. I just looked at the book from one of my internships and there's only like 55%-60% of European and brits. I think the problem comes from before. I'd like to know what percentage of the Oxbridge, Cass, Durham, Grande Écoles, Bocconi, SSE and those kind of unis is not white. Because I'm pretty sure banks are more diverse than the universities they recruit from.
3.- I would argue that a coloured person has actually a higher chance, although not by much. Banks hold specific networking events for minorities and women so there are much fewer people and the people from the bank attending are generally much more helpful. Apart from that no one really thinks about it. When people at my desk talk about candidates race never comes up, and when we receive the applications for screening the page about gender and race is missing, so we truly don't know the race of the candidates. That's only used for HR statistics.
4.- Extracurriculars are crucial at the interview stage, even if you suck, but just as a conversation topic. If you do the technicals well, study at a good uni and a serious degree with good grades (2:1 is fine) the make or break is generally on those kinds of things. You need to sound fun and interesting, someone I can go for a beer with and talk about anything meaningless to unwind, sports, cars, music... If you like something and your interviewer does as well your chances are pretty good. For instance I once spent an entire interview talking about marathon preparation and sent the guy a software to design his own plan. I'm guessing his feedback was awesome. If you are all about finance you won't get hired.
Why do you mix everything with race? I mean, if I like you because you play football I like you because you play football. What difference does it make if you are a black pianist or a white pianist??? The thing is I know you have interests, and I like classical music, so we can talk about something. I mean, you could be a green pianist for all I care...
f4tality: Day in a life :)
Day in a life :) ?
Also, what's your interaction with Sales and Structuring like and what's your take on your job and their's (like it / hate it etc)?
Interaction varies a lot depending on what you trade exactly and how your firm is structured. In rates for example, Govies people have way less interaction with structurers than the exotics desk.
In general products with a high flow (Govvies and Swaps in rates) will interact a lot with the sales force, providing prices and asking for feedback. So for example if a sales guy asks for a price in XYZ bond and we don't close the trade the trader will ask the sales guy to try and find out what price did the client get. This helps to read the market and how other people in the street are marking their books. They will talk to structurers from time to time to give them market comment and maybe participate in the pricing of something, but not that much.
The exotic desk will work quite closely with the structurers in coming up with new ideas and pricing stuff. Then the trader will trade it and keep managing the risks in the book (which tend to be quite large and for a very long time on these products). The people trading the more vanilla stuff provide prices for the sales force, but since the flow is way lower you talk to them less. They also price more complex stuff for the sales force, but this isn't a 2 second process like giving a price on a bond, it's fine if you take minutes to give a price. Sales and structuring interact a lot between themselves, since sales people handle the relationship with clients that want very complex bespoke solutions or just the people the structurers want to sell their new idea to. The structurers will come up with it, price it with the traders and then go along to the meetings with the sales guys to pitch the product.
My take on their job is that every job is different, has it's pros and cons and they are all suited for a different personality. Interns are sometimes very closed-minded (guys want to trade, girls want to sell, no one wants to structure) when many times there are better fits and opportunities for them.
I am hugely generalizing here because the roles vary a lot depending on bank, product, etc..
Trading is probably the worst job in many aspects, it's the one that has more downsides in my opinion. It's exciting, you are the only one who manages risk and that is very appealing for some people. You are in close contact with the market and it's a constant challenge. The downside is you specialize way too much (as in you will trade the Euro Swap curve between 5y and 10y and that's your whole world) so it can get repetitive and boring after a while if you don't love it. There's a lot of pressure, specially in market making, sometimes you get stuck with a position you can't get out of but if you lose money you still have to explain yourself, even if it wasn't your fault which can be very frustrating. There's pretty much no exit opportunities, unless maybe trade something similar or trade at another firm. There are also certain politics involved with the sales force and big clients when giving prices, and some times you can either take some risk on your books that you really don't want or spend an hour on the phone explaining yourself, which drives some traders crazy.
Sales allows you to meet clients and develop relationships with them. For some people client contact is everything. You are also following the markets closely, so there is the excitement component. You will see many more products than in trading which is cool. You make presentations and pitches, which some people love. Downsides are you are not a decision maker, just an intermediary. You don't know products and risk in depth. You have to be a good politician, because you have 2 clients, the firms clients and your traders. If you keep fucking your traders over they won't give you good prices. On the other hand, if you help them when you can, then chances are that when you need a favour to score points with an unhappy client the traders will do it, so it's a difficult balance.
Structurers are the more quanty people. They see a lot of different products in depth, which makes them experts in pretty much everything, so it's the best education you can get on the floor, and can be very useful to move to trading or sales. Many people at my firm have done those moves. You also get to work on longer projects and analyze things in depth if you like that, and that gives you more flexibility (as in you can leave the office and go for lunch with a friend if you want to) You also get some client interaction, so it's a good balance with a sales role. Downside is you tend to be very removed from the markets and the day to day minute to minute excitement, which makes the transition to other roles harder for some people.
There are also a lot of mixed roles and overlap, for example trading structured products is very different from govvies, but as a generalization I guess this works.
Day in my life is a bit difficult because work varies a lot and what we do is pretty much give prices all day, but I'll try.
I wake up at 5:30-45, shower and get something to eat and drink (I have breakfast in the tube to optimize my time). I get in at 6:45 or so. First thing I do is send the risk out to the desk so everyone knows what we have in the books. Then send our axes to the sales force. Afterwards, I read all the market commentaries from our traders in Asia and news in newspapers, BBG, email, etc... Sometimes I go to the morning meeting if the desk has something special to say or there is anything particularly important that day. I generally have another breakfast at around 8 or 9. By this point markets are already active so from then on is more about following the markets, booking trades, solving problems about spreadsheets and settlements and shit like that with the back office, helping the senior traders in whatever they want me to and making some small trades on my own. When I get a bit of free time I read internal research on our markets and work on some long term projects (like improving spreadsheets and stuff like that) and ideas I have. I have lunch between 12 and 2 depending on how busy I am. At around 5 I start doing the daily PnL, and writing market commentary for the firm. When I finish I'm pretty much free to go home. I generally spend some time working on those long term projects or go straight home/gym/beers, depending how tired I am. I generally get out between 6 and 7.
Black pianist and a white
Black pianist and a white pianist from what I've seen online makes a BIG difference.
[quote=Maximus Decimus
[quote=Maximus Decimus Meridius]
Thanks a lot, SBed
PM: Hey man, Thanks for the
Hey man,
Thanks for the Q&A, I got some question. I work on the trading floor for a Continental European bank. My current gig has no fixed training program. I have been doing well and am running one of the high yield books with fairly limited experience. Very happy where I am for now but would love to be able to take on more risk in the future. How are the continental European banks viewed in London? Is it a viable move to go from a viable to move from a smaller European bank to one of the BB's in London? What sort of level is likely to enter at?
Bonus question: Do you have any idea about the type of risk the HY guys at your floor are running?
Thanks again
I am by no means an expert on experienced hires, but I guess it depends what continental european bank. BNP and SG are very respected in certain products and there are plenty of people in the floors of BBs coming from those firms. Places like Unicredit or Santander or Commerzbank also place some people, although not many, specially in trading. From what I see here, I think it's much easier to this at a medium/high level, so VP and above. That way you will have a track record and reputation and likely know someone in your product at the BBs that will help you get in. I don't know of anyone who has done it at the junior level. Maybe someone coming in through the graduate program, but for that you need to have been at your firm less than a year...
Can't give exact details on the HY books and what they are running, my educated guess is it depends a lot on the trader. It is very meritocratic here, and you see people who are 1.5 years in running the same risk as some people who have been here for 5 years. It depends on what you trade and how good you are...
fearless: Black pianist and a
Black pianist and a white pianist from what I've seen online makes a BIG difference.
Well, if the internet says so there's nothing I can argue against it.
Great thread.
Great thread.
Turbo leverage for capital explosion -- BD Capital
My WSO Blog
Maximus Decimus
Thanks for doing this!
What are your top 3 tips for assessment centres? How do you stand out in a group of 20 people who are just as good on paper and have read the same guides as you?
I have been to 5+ assessment centres and always got an offer....
thank you!
"Every man should lose a battle in his youth, so he does not lose a war when he is old"
Commenting to stay in the
"Do not go gentle into that good night"
SB'd :) Your post on the AC
thanks for doing this. 1.
Wow. Best thread regarding
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
whalesquid123: thanks for
1.) How do you calm your
PM: Thanks a lot for taking
Thanks for taking the time to
I'm interning at the FICC
MomentaLaugh: 1.) How do you
Thank you for doing this.
simon-kemp: Thanks for taking
thanks for the replies, good
Hi Maximus thanks for doing
Monkeyfaces: I'm interning at
KKS: Thank you for doing
whalesquid123: thanks for the
Thank you, this helps more
whotookmybowtie: Hi Maximus
How is the compensation for
Thanks for doing this. Do you
"I swear, by my life and my love of it, that I will never live for the sake of another man, nor ask another man to live for mine."
Maximus Decimus
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
This is a great thread. I
Revsly: Maximus Decimus
Turbo leverage for capital explosion -- BD Capital
My WSO Blog
I would love to ask how hard
I would also like to know
Are you familiar with how the
Forgot to add: as
Ludendorff: How is the
Revsly: Maximus Decimus
Macro Arbitrage: Thanks for
ranney95: I would love to ask
KKS: Are you familiar with
Thanks for your detailed
Charles-perry: Thanks for