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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.

6

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Comments (124)

  • RichardPennybags's picture

    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"

  • JWick's picture

    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?

  • Charles-perry's picture

    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).

  • f4tality's picture

    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)?

  • In reply to RichardPennybags
    Maximus Decimus Meridius's picture

    RichardPennybags:
    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".

  • In reply to JWick
    Maximus Decimus Meridius's picture

    JWick:
    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.

  • In reply to Charles-perry
    Maximus Decimus Meridius's picture

    Charles-perry:
    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 Ecoles, 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...

  • In reply to f4tality
    Maximus Decimus Meridius's picture

    f4tality:
    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.

  • fearless's picture

    Black pianist and a white pianist from what I've seen online makes a BIG difference.

  • In reply to Maximus Decimus Meridius
    f4tality's picture

    Maximus Decimus Meridius][quote=f4tality:

    Thanks a lot, SBed

  • In reply to Maximus Decimus Meridius
    Maximus Decimus Meridius's picture

    PM:
    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...

  • SirTradesaLot's picture

    Great thread.

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

    MY BLOG

  • In reply to Maximus Decimus Meridius
    RichardPennybags's picture

    Maximus Decimus Meridius:
    RichardPennybags:
    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"

The WSO Advantage - Trading

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Video Library - 1 Year ($400 value). Learn More.

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30,000+ sold & REAL questions. Learn More.

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Land More Trading Interviews. Learn More.

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  • tangent style's picture

    Commenting to stay in the loop on this
    Great so far

    "Do not go gentle into that good night"

  • whalesquid123's picture

    thanks for doing this.

    1. why'd you say that traders have "pretty much no exit opportunities"? i'd think you see a lot of rates traders being snapped up by macro funds if they're good.

    2. do you think the exit opps vary according to the specific rates product you trade (i.e. cash bonds, swaps, options, or inflation)? i ask because i've noticed a few high profile hires to hedge funds being ex-swaps traders, but wasn't sure if it was just coincidence, or something specific that one learnt from trading swaps.

    3. bondarb has said that rates impact all other markets, so understanding rates (especially the front end) will help you understand what other markets are doing. are you really able to see these connections between rates and fx/commodities? do these connections between rates --> fx/commodities persist in times OTHER than those immediately surrounding a big central bank announcement?

    4. which banks have the most respected (feared?) rates traders?

  • Working9-5's picture

    Wow. Best thread regarding trading so far this year.

    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

  • In reply to whalesquid123
    Maximus Decimus Meridius's picture

    whalesquid123:
    thanks for doing this.

    1. why'd you say that traders have "pretty much no exit opportunities"? i'd think you see a lot of rates traders being snapped up by macro funds if they're good.

    2. do you think the exit opps vary according to the specific rates product you trade (i.e. cash bonds, swaps, options, or inflation)? i ask because i've noticed a few high profile hires to hedge funds being ex-swaps traders, but wasn't sure if it was just coincidence, or something specific that one learnt from trading swaps.

    3. bondarb has said that rates impact all other markets, so understanding rates (especially the front end) will help you understand what other markets are doing. are you really able to see these connections between rates and fx/commodities? do these connections between rates --> fx/commodities persist in times OTHER than those immediately surrounding a big central bank announcement?

    4. which banks have the most respected (feared?) rates traders?

    As I said I'm a first year, so I don't have a lot of experience in things like moving to HFs or what they trade exactly, but I'll give you my thoughts.

    1.- You are right that you can go to a macro fund, my point is if you do move from a rates desk you'll still be trading and most likely the same markets, only you are a pure risk taker instead of a market maker. But it's not really an exit opp in the sense that if you get burnt out and hate trading swaps, then you'll hate the job at the fund as much whereas if you are in M&A you can go to Business School and do something completely different. If you are in sales you can sell anything, and if you are in structuring you can do ALM and that kind of thing in the firm or in any financial services company. Besides, I think you are greatly overestimating the number of rates traders that go to HFs. I don't have numbers, but my guess is macro funds will probably hire an experienced trader with a proven track record who runs some decent risk, so most likely at one of the BBs who has a big rates book. So you are already picking from very few traders, and not all of them are good or able to trade without the flow. Maybe someone with more experience can shed some more light on this.

    2.- Could be. I mean, they should all be able to make the move, but it makes sense for the guys in STIR, Swaps and Inflation to have it easier, although it's just a guess. Basically because Swaps and STIR guys trade the same products as HFs do, also the most liquid ones and the ones that in many ways drive the rest of the rates and the fixed income world. So if you understand and are able to read the movements of those markets, you can read all the rates markets. The inflation guys trade nominal bonds and swaps as well as inflation bonds and swaps, many of them in sterling and euros, which makes them very knowledgeable of all the liquid rates markets, and historically they've placed very well. The value the exotics desks adds is more on pricing and quantifying the risk of very complex combinations of products, they can be very valuable at handling hard to hedge risks, but they might struggle with the pace and speed of decision making required when trading swaps. Bond markets have a very particular dynamic because they are specific bonds and there's only a certain amount outstanding of each bond, whereas swaps and futures can be infinite. Trading bonds is very capital intensive and shorting them requires getting your hands on them through repo which for some bonds can be very hard and expensive, so I'm guessing HFs don't trade them as much as swaps or bond futures.

    3.- Rates are the base of everything. Think about this, every book you read about how to price any financial security mentions rates somewhere. In fact, you will see that pretty much all fixed income trading desks have rates products on their books as hedges and some even have exclusive rates books. Whereas rates people don't really have credit or fx products on their books. Maybe CDSs on particular countries in the govvies desk, but that's about it. Revsly trades FX options and I think I remember him saying he also has a rates book for example. Maybe if someone who trades credit or fx can elaborate it would be helpful.

    4.- Lol, I don't really understand the question to be honest, so if you could rephrase...

  • MomentaLaugh's picture

    1.) How do you calm your nerves?

    2.) What brands are mostly found in your work wardrobe?

  • In reply to Working9-5
    Maximus Decimus Meridius's picture

    PM:

    Thanks a lot for taking the time for this thread :). I'll be joining a regional coverage sales team this summer at a BB, and I was curious what the "trade idea" generation process is like for sales people? I know for vanilla products like equity sales it's mostly pushing forward the firm's research, but I was curious what it's like / what type of ideas are pitched to clients on the more exotic side (equity derivatives etc).

    You are not obligated to push firm research, but it's frowned upon if you don't, specially if you do it often. You still have a lot of firm research on things like rates. In Fixed Income you will also have a morning meeting from each space (credit, rates and FX) in the morning where all the research guys will talk, then someone from each of the liquid trading desks like govvies and swaps, and the sales guys will take notes and ask questions, so I guess a lot also comes from there. They will also try to push traders axes and risks they don't want.
    If you go to the exotic products, generally sales people provide the relationship with the client and do a lot of the hand-holding and communication between structuring/trading and the client, not really the idea since they are more bespoke and complex products. So they will push their structurers products or help create something bespoke for the client. Besides many of this products don't have an investment goal and are more of a Liability Management kind of thing.

  • simon-kemp's picture

    Thanks for taking the time to answer questions. I'm a bit of an IB newbie so excuse any gap in my knowledge - you said you worked in S&T? Could you possibly give a breakdown of the universities analysts went to or a rough guide? I'm hoping to work in IB in London and have several university offers (Bristol, LSE, UCL), deciding which one is best to pick for what I intend to do (M&A is an attractive option)

  • Monkeyfaces's picture

    I'm interning at the FICC department at a BB in London this summer, so I was wondering how you can get the return offer? What did you do that set you apart from all the other interns?

  • In reply to MomentaLaugh
    Maximus Decimus Meridius's picture

    MomentaLaugh:
    1.) How do you calm your nerves?

    2.) What brands are mostly found in your work wardrobe?

    1.- I'm not really a nervous person, so I do the same things I've done all my life. Nothing unusual. After a particularly stressful time of the day I generally just talk about nonsense with the people in my desk, go to the vending machine for a Coke or talk to some analyst friend at another desk or someone on a chat or something. I'm also a long distance runner, so running something like 6-10 miles gives me a lot of time to think when I have a lot of things in my head and I get home completely relaxed. I also do Karate which I guess helps when I'm pissed off.

    2.- I'm not much of a brand guy, I find they are pretty much all quite tacky. Tailor made shirts, suits from a small shop I know in London, or dark dress pants I find in local shops or places like brooks brothers or hackett with a good old fashion V-neck wool jumper in a solid discrete colour, mainly Alan Paine but as long as the brand doesn't show anywhere I don't mind. Shoes some C&J and AE, although I do have a couple from no-name local shops as well. I keep 2 ties at the office, they are both TM Lewin and are the kind that match any shirt and suit, just in case, but never wear them to the office.

  • KKS's picture

    Thank you for doing this. What do you think of the LBS MiM and LSE's MSc Finance/Finance & Accounting/Finance & Economics degrees for breaking into investment banking? I am an American with an EU citizenship considering those programs (not for trading, but IB, though).

  • In reply to simon-kemp
    Maximus Decimus Meridius's picture

    simon-kemp:
    Thanks for taking the time to answer questions. I'm a bit of an IB newbie so excuse any gap in my knowledge - you said you worked in S&T? Could you possibly give a breakdown of the universities analysts went to or a rough guide? I'm hoping to work in IB in London and have several university offers (Bristol, LSE, UCL), deciding which one is best to pick for what I intend to do.

    All those 3 unis are fine and have decent numbers in investment banks, so can't really go wrong. LSE would be the highest of the 3 in terms of placements I think.

  • whalesquid123's picture

    thanks for the replies, good stuff.

    what i meant by the last question was simply: which banks have the best rates trading desks and most skilled/respected traders, based on their reputation on the street (instead of measures like revenue and pnl which may be more a function of the sales force)?

  • whotookmybowtie's picture

    Hi Maximus thanks for doing this. So could you kindly suggest some training or reading materials that you used to sharpen your abilities as a student. Or anything you found particularly insightful when learning about rates trading?

  • In reply to Monkeyfaces
    Maximus Decimus Meridius's picture

    Monkeyfaces:
    I'm interning at the FICC department at a BB in London this summer, so I was wondering how you can get the return offer? What did you do that set you apart from all the other interns?

    Mmmm kind of a hard one. I haven't had an intern yet, so from my interning experience. First of all don't do anything stupid like falling asleep on an MD conference while sitting in the first row or shit like that. It sounds silly but a lot of people don't get offers for things like that.
    Follow the basics. Things that come to mind:
    -First one in, last one out.
    -Be nice, calm, smiling, willing and helpful no matter what they ask you to do. Don't look/act tired.
    -Check your work a billion times, always print it and look for errors on paper. You'll get incremental amount of responsibility based on the quality of your work. If you screw up the basics, you won't get anything cool.
    -Underpromise and overdeliver. Always add something to whatever you are asked to do (you asked me to analyze XYZ, but I thought it could be interesting to add XYZ). Always hand in your work earlier than expected and say it's a draft and if they could point out how to improve it (try to use the juniors for this).
    -Don't kiss the MDs and EDs ass and piss off your juniors, but don't be afraid to talk to the higher ups either.
    -If you go sit with other desks make sure you don't have any work to do and always ask if it's OK and tell them where you are going. They will get really pissed of if they need something from you and they can't find you.
    -Be nice, fun, polite and integrate yourself. If you are going for a coffee, ask if anyone wants. If they are talking about football get into the conversation. Forward funny emails. If they all order lunch from somewhere or go for a beer after work and ask you to join don't say no. That kind of stuff.
    -Don't badmouth other interns.
    -Ask for feedback after your work and once a week, don't wait for the HR thing. You should know what HR is going to say in your reviews.
    -This is not IBD but things need to look decent. After doing a spreadsheet, format it. Don't obsess and spend 3h on it, but make damn sure it's readable.
    -Read the floor. Use the time early in the morning, during lunch and after markets for questions. Use the busier times of the day to work by yourself. If you don't have any projects use the firms internal training, read internal research or a book on bond pricing, I don't care but do something useful, work related and where you can learn. Go ask questions afterwards so that they notice you have initiative.
    -Write things down. Make sure you never ask the same question twice. Also, if you are doing a project make sure you ask all the questions in advance and write the rest down and accumulate. Also make sure you google it, look in investopedia, books, research and internal training. Don't go every ten minutes to one of the traders to ask something you could have found by yourself.

  • In reply to KKS
    Maximus Decimus Meridius's picture

    KKS:
    Thank you for doing this. What do you think of the LBS MiM and LSE's MSc Finance/Finance & Accounting/Finance & Economics degrees for breaking into investment banking? I am an American with an EU citizenship considering those programs (not for trading, but IB, though).

    I didn't study in the UK and I have never done IBD, so don't really know a lot. LBS MBA is very valued, don't know about the MiM and LSE is a great and respected uni, lots of people from their masters so I guess they should help.
  • In reply to whalesquid123
    Maximus Decimus Meridius's picture

    whalesquid123:
    thanks for the replies, good stuff.

    what i meant by the last question was simply: which banks have the best rates trading desks and most skilled/respected traders, based on their reputation on the street (instead of measures like revenue and pnl which may be more a function of the sales force)?


    If you don't account for volume/market share or PnL I think it's pretty much the same. I don't really know how to say which one is best because I don't know how to measure it. Every bank has a rates desk, it's one of the very basic desks, and at BBs they are all fairly big and respected.
  • zeroblued's picture

    Thank you, this helps more than you can imagine.

  • In reply to whotookmybowtie
    Maximus Decimus Meridius's picture

    whotookmybowtie:
    Hi Maximus thanks for doing this. So could you kindly suggest some training or reading materials that you used to sharpen your abilities as a student. Or anything you found particularly insightful when learning about rates trading?

    Specific for rates and pure "textbooks":
    Interest Rate Swaps and Their Derivatives
    Pricing and Hedging Swaps
    The handbook of Fixed Income securities
    The Treasury Bond Basis

    In here: http://www.traders-library.com/ you can find pretty much any book in pdf in the trading books and trading knowledge files.

  • Ludendorff's picture

    How is the compensation for your division?

  • Macro Arbitrage's picture

    Thanks for doing this. Do you have your own book to punt ideas and take risks? If so, to what extent does flow have bearing on your idea generation process? Also, how did you manage to overcome your grades during your internships and FT recruitment?

  • In reply to Maximus Decimus Meridius
    Revsly's picture

    Maximus Decimus Meridius:
    whalesquid123:

    3. bondarb has said that rates impact all other markets, so understanding rates (especially the front end) will help you understand what other markets are doing. are you really able to see these connections between rates and fx/commodities? do these connections between rates --> fx/commodities persist in times OTHER than those immediately surrounding a big central bank announcement?

    3.- Rates are the base of everything. Think about this, every book you read about how to price any financial security mentions rates somewhere. In fact, you will see that pretty much all fixed income trading desks have rates products on their books as hedges and some even have exclusive rates books. Whereas rates people don't really have credit or fx products on their books. Maybe CDSs on particular countries in the govvies desk, but that's about it. Revsly trades FX options and I think I remember him saying he also has a rates book for example. Maybe if someone who trades credit or fx can elaborate it would be helpful.

    Like Maximus mentioned, I'm an FX Options trader and we always have rates positions, largely due to the fact that while the underlying instrument is the forward, we generally hedge delta with spot (it's liquid). As a result, I have to manage our rates positions via FX Swaps, IR Swaps, X-CCY Basis swaps, IR Futures, etc. Furthermore, I trade IR in my back book too, as I am a very macro person and I find it much more pure to express views in rates... FX Spot can be influenced by many factors, but say f/e OIS is what it is largely.

    Everything is very interconnected, and those times where it disconnects usually there is a reversion trade to play. Just a simple example is with the Redemptions on Friday. I had some sizeable EUR delta positions on, so was closely monitoring the Euribor strip to see if rates market was reacting in confirmation with my position. Sometimes FX can drive IR though, and a recent example would be in Swiss rates. For a while, the euroswiss futures were trading above 100 (implying neg swiss libor) as the SNB attempts to protect its 1.20 floor in EURCHF. As EURCHF spot rallied quite a bit, it becomes less likely SNB will need to intervene in the rates market, and while it took a few days for the larger impact to happen, the euroswiss strip sold off quite hard. For a participant who wasn't paying attention to other markets, you might miss crucial information that costs PNL.

    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

  • blocktrade's picture

    This is a great thread. I work on the other side of the desk as the salesforce in Rates. I may make a thread like this soon to help anyone who is interested.

    In the end, the king and the pawn go in the same box.

  • In reply to Revsly
    SirTradesaLot's picture

    Revsly:
    Maximus Decimus Meridius:
    whalesquid123:

    3. bondarb has said that rates impact all other markets, so understanding rates (especially the front end) will help you understand what other markets are doing. are you really able to see these connections between rates and fx/commodities? do these connections between rates --> fx/commodities persist in times OTHER than those immediately surrounding a big central bank announcement?

    3.- Rates are the base of everything. Think about this, every book you read about how to price any financial security mentions rates somewhere. In fact, you will see that pretty much all fixed income trading desks have rates products on their books as hedges and some even have exclusive rates books. Whereas rates people don't really have credit or fx products on their books. Maybe CDSs on particular countries in the govvies desk, but that's about it. Revsly trades FX options and I think I remember him saying he also has a rates book for example. Maybe if someone who trades credit or fx can elaborate it would be helpful.

    Like Maximus mentioned, I'm an FX Options trader and we always have rates positions, largely due to the fact that while the underlying instrument is the forward, we generally hedge delta with spot (it's liquid). As a result, I have to manage our rates positions via FX Swaps, IR Swaps, X-CCY Basis swaps, IR Futures, etc. Furthermore, I trade IR in my back book too, as I am a very macro person and I find it much more pure to express views in rates... FX Spot can be influenced by many factors, but say f/e OIS is what it is largely.

    Everything is very interconnected, and those times where it disconnects usually there is a reversion trade to play. Just a simple example is with the Redemptions on Friday. I had some sizeable EUR delta positions on, so was closely monitoring the Euribor strip to see if rates market was reacting in confirmation with my position. Sometimes FX can drive IR though, and a recent example would be in Swiss rates. For a while, the euroswiss futures were trading above 100 (implying neg swiss libor) as the SNB attempts to protect its 1.20 floor in EURCHF. As EURCHF spot rallied quite a bit, it becomes less likely SNB will need to intervene in the rates market, and while it took a few days for the larger impact to happen, the euroswiss strip sold off quite hard. For a participant who wasn't paying attention to other markets, you might miss crucial information that costs PNL.


    I would just like to say that Revsly doesn't post often, but posts with authority. Absolutely one of the best posters on WSO, without a doubt.

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

    MY BLOG

  • smashzR's picture

    I would love to ask how hard do you find breaking into London S&T coming from a non-target UK uni, also I'd appreciate if you could elaborate on which UK unis do you consider as targets;semi-targets?

    Thanks!

  • Seeker's picture

    I would also like to know what are the best european/uk universities for a MSc in Finance in order to break into IB in London. I know the classic ones, like Oxford,LSE,Imperial, but if I don't get accepted to one of those, what's the next top uni? Warwick or Cass or something else?

  • KKS's picture

    Are you familiar with how the interview process for IB and S&T works in the US? If so, how does it differ in Europe?

  • In reply to Revsly
    whalesquid123's picture

    Revsly:
    Maximus Decimus Meridius:
    whalesquid123:

    3. bondarb has said that rates impact all other markets, so understanding rates (especially the front end) will help you understand what other markets are doing. are you really able to see these connections between rates and fx/commodities? do these connections between rates --> fx/commodities persist in times OTHER than those immediately surrounding a big central bank announcement?

    3.- Rates are the base of everything. Think about this, every book you read about how to price any financial security mentions rates somewhere. In fact, you will see that pretty much all fixed income trading desks have rates products on their books as hedges and some even have exclusive rates books. Whereas rates people don't really have credit or fx products on their books. Maybe CDSs on particular countries in the govvies desk, but that's about it. Revsly trades FX options and I think I remember him saying he also has a rates book for example. Maybe if someone who trades credit or fx can elaborate it would be helpful.

    Like Maximus mentioned, I'm an FX Options trader and we always have rates positions, largely due to the fact that while the underlying instrument is the forward, we generally hedge delta with spot (it's liquid). As a result, I have to manage our rates positions via FX Swaps, IR Swaps, X-CCY Basis swaps, IR Futures, etc. Furthermore, I trade IR in my back book too, as I am a very macro person and I find it much more pure to express views in rates... FX Spot can be influenced by many factors, but say f/e OIS is what it is largely.

    Everything is very interconnected, and those times where it disconnects usually there is a reversion trade to play. Just a simple example is with the Redemptions on Friday. I had some sizeable EUR delta positions on, so was closely monitoring the Euribor strip to see if rates market was reacting in confirmation with my position. Sometimes FX can drive IR though, and a recent example would be in Swiss rates. For a while, the euroswiss futures were trading above 100 (implying neg swiss libor) as the SNB attempts to protect its 1.20 floor in EURCHF. As EURCHF spot rallied quite a bit, it becomes less likely SNB will need to intervene in the rates market, and while it took a few days for the larger impact to happen, the euroswiss strip sold off quite hard. For a participant who wasn't paying attention to other markets, you might miss crucial information that costs PNL.

    great info, thank you Revsly.

    because i know almost nothing about rates/fx, i would like to see if i understand the relationship correctly.

    - front end OIS and interest rate futures - are they driven solely by expectations of what the central banks will do at the next meeting, or are there other drivers of these instruments?

    - when you had the EUR delta position and were looking to see if the Euribor strip (is this a zero-coupon IR future?) was moving in line, what did you expect would happen to EUR if the strip rallied, implying rates would fall? for the US, i'd associate a rate cut with broader concern about global growth, which would cause investors to pile into Treasuries and cause USD to rally. for all non-US markets, i'd think that if rates fall, the currency would sell off due to expectations that the supportive monetary policy would lead to future inflation. but in the case of EUR, perhaps a rate cut signals commitment to supporting the EUR and keeping it together, which might cause it to rally?

    basically my question is, you can come up with so many different economic arguments in either direction (i.e. rates fall, does fx go up or down) - which is really the right one?

  • In reply to Macro Arbitrage
    Maximus Decimus Meridius's picture

    Macro Arbitrage:
    Thanks for doing this. Do you have your own book to punt ideas and take risks? If so, to what extent does flow have bearing on your idea generation process? Also, how did you manage to overcome your grades during your internships and FT recruitment?

    I just got my own book, so I don't really take much risk. Don't take punts, I do the smaller trades of the desk and if I get some risk I like I let it run a bit, but not much. However yes, we can keep risk we like and not hedge it out immediately, or take risk ourselves. Flow gives you extra information, so even when trades are not happening you still get a vibe for what clients are looking to do, which is helpful. It also gives us some extra liquidity, in the sense that if you don't see any bids in the market you can try and sell to a client through the sales guys. However, most of our risk is "reactive" risk, in the sense that it has to do with serving clients. So residual risks after trades, getting stuck in positions you don't want, or building inventory according to how you think the market is going to move. So for example if you know all your fast money clients are positioned the same way, and the market is moving/going to move against them (smth like a short squeeze) you need to prepare your books for when they come looking to unwind. My point is most of this is not taking punts but trying to not lose too much money when making a market. However yes, we are allowed to put on positions ourselves and keep them, I just don't really have enough confidence yet, but I don't think flow has much bearing on the fundamental views of the senior traders here.
    To overcome bad grades you need to figure out a different way in. In my case I won a trading game organized by one of the banks. They are actually more useful than people in this site make them to be. It allowed me to interview for a summer internship even though I had 2 years of uni left, and I did well enough that I got the job. After that, I always needed someone to push my resume internally, because my grades wouldn't get me through the HR screening, or in some cases I put "Expected Grade" instead of "Obtained Grade" and pushed it up enough to make the cut. With a BB SA position, when my CV got to the business people I got interviews pretty much everywhere and then just went through the process.

  • In reply to smashzR
    Maximus Decimus Meridius's picture

    ranney95:
    I would love to ask how hard do you find breaking into London S&T coming from a non-target UK uni, also I'd appreciate if you could elaborate on which UK unis do you consider as targets;semi-targets?

    Thanks!

    Seeker:
    I would also like to know what are the best european/uk universities for a MSc in Finance in order to break into IB in London. I know the classic ones, like Oxford,LSE,Imperial, but if I don't get accepted to one of those, what's the next top uni? Warwick or Cass or something else?

    I think breaking into S&T in London is extremely hard, you can only do it through internships since banks don't really hire full time any more, which means you have people with 1 or 2 internships at BBs applying for internships, so it's very hard. Like I said, if you come from a non-target you need to find a different way in, and your grades will need to be perfect and have some relevant experience. Depends what year you are in, but I would try to get experience at some smaller firms before trying BBs.

    For both of you, I didn't study in the UK, so I'm not an expert. But people here seem to be from Oxbridge, LSE, Imperial, UCL, Warwick, Cass, Bath, Durham, Bristol, some undergrad but most people have some kind of masters.

    Also, there are some very good European unis. Bocconi and HEC masters students place extremely well, I'd say better than most UK unis for example. But it depends on your language abilities...

  • In reply to KKS
    Maximus Decimus Meridius's picture

    KKS:
    Are you familiar with how the interview process for IB and S&T works in the US? If so, how does it differ in Europe?

    They don't have ACs, they have superdays, which are just many interviews in a row. You will have the same in Goldman in London (they don't do AC) and it will also be part of the AC at other firms. Bear in mind an AC can run from 8am until 5pm or something like that...
  • Charles-perry's picture

    Thanks for your detailed reply. Couple more questions if you don't mind.

    1. What interesting stuff did you have on your CV while applying/stuff you talked about during interviews (other then marathon running and classical music - or were these the things that made you stand out?).

    2. Can you describe the typical personality of someone who lands an offer/does well in trading.

    3. Are most/all traders super smart (ie A grades at A level, first class in econ/finance etc, GMAT 700+ and so on) or does it vary? What if your smart but not super smart (i.e. get through academics fine but now a whiz kid on IQ math questions). What % of traders have a masters? For IBD I keep seeing its a 50/50 split between undergrads/postgrads and 90%+ are Caucasian which is why i used the generalisation above.

    4. Do the traders do stuff together after work e.g. bars etc? You mentioned the classes are pretty mixed - so I'm assuming there are muslim people who don't drink (so a bar is awkward for them) or indian people who are veg (therefore a steakhouse is awkward for them). Are they doomed even before they enter the building?

    5. What if your more of a micro person and don't like following the 'interest rate changes in the federal reserve' for example (but are aware of large macro trends). Should you only consider the equities division? Or another job entirely?

    6. What resources do you use to keep up to date with the financial press? FT?

    7. How do you make money? The bank teaches you to follow a specific model (made by quants?) and then you follow it? How much room is their for your own input in trades? Can you explain a typical 'trade timeline' i.e. the process of what you do.

    8. How valuable are programming skills? Which ones are the most valuable?

    9. If you can't land a summer internship in S&T, what do you recommend to undergrads to do with their time? (other then work experience in a similar/smaller shop)

    10. What do you recommend from the trading-library.com?

    Thanks! :)

  • In reply to Charles-perry
    Maximus Decimus Meridius's picture

    Charles-perry:
    Thanks for your detailed reply. Couple more questions if you don't mind....

    1.- National champion of a team sport, serious charity work (as in spending 6 months in south east asia) and marathon were the most popular and definitely provided a lot of conversation. There are quite a lot of athletes in the floor.

    2.- Varies a lot by desk. Cash products tend to be more fratty/extroverted/loud, whereas exotics have more introverted/geeky guys, but it's a huge generalization. In general, people who are comfortable making decisions and taking responsibility for them when they go wrong, who are very disciplined and who can handle pressure.

    3.- Not really super smart. They are all obviously smart, since banks hire people with good academic backgrounds from top unis, but in no way are we Einsteins. Exotics desks tend to have more quanty and analytical people (lots of Asian, Indians and French guys) whereas cash people are faster decision makers, but again huge generalization. Also I disagree with the notion that grades are a perfect proxy for smartness, but maybe is because I had shitty grades in uni. High % have a masters, although in places like Spain, Germany or France Masters degrees are undergrad degrees, so hard to say.

    4.- Some desks don't, some go for beers every now and then and some even go on holidays together, each desk is different. There's no problem at all with that kind of thing, honestly, people don't care. In my desk there's a Muslim who leaves 4 times a day to pray, does Ramadan and doesn't drink and it's fine. He just has a Coke when we go for a beer and we cover his book when he's praying. And Indians are not veggies for the most part, but again, it's fine if you order something vegetarian. All the London restaurants will have a veggie option.

    5.- Equities would be a better fit for you. So would cash credit.

    6.- Now I only read like opinion articles or in-depth reports in the FT/WSJ and specially The Economist. News from yesterday aren't of much use, I will already have read them on BBG.

    7.- Your desk teaches you how to trade. Position sizes, how to hedge risks, discipline, what risks do you have, how to interpret different info/news, how to make prices and that kind of thing. Quants make trading models for algo and high frequency trading, not for us. For us they help to build pricing tools, spreadsheets and stuff like that, which we try to improve constantly and then getting help from IT to implement them. Typical trade, a sales guy comes in through the box asking for a price on something, look at what we have on the book, who the client is, what I think the market is going to do, what prices am I seeing in brokers/BBG/etc... what price action looks like on the security and the stuff I'm going to use to hedge, give a price to the sales guy, he confirms the trade, I book it and start thinking what I'm going to do with it. Either unwind it instantly, some of it, keep it in the book, buy something against it...

    8.- Excel/VBA can be extremely helpful.

    9.- Try to find something in finance as closely related to the markets as possible. Asset Management, HF, even PWM.

    10.- My list is basically compiled from WSO. I haven't read all of them, so pick according to what you are interested in. This only includes technical books, I would also read books on the industry like More Money than God, Reminiscences of a Stock Operator, Market Wizards I and II, Inside the House of Money, etc... Not technical stuff but will help understand the industry.

    Options Trading by Frans de Weet.
    Margin of Safety
    Distress Investing by Marty Whitman.
    Hull - Options, Futures and Derivatives
    Technical Analysis-Japanese Candlestick Charting
    Energy Trading and Investing
    Security Analysis by Benjamin Graham.
    Margin of Safety .
    Come into My Trading Room by Alexander Elder
    Options Volatility and Pricing by Natenberg
    Exotic Options Trading (maybe Revsly can help more here)
    Foreign Exchange by Tim Weithers
    Credit--Fabozzi;
    Distressed Debt Investing;
    Handbook of Municipal Bonds
    The Handbook of Mortgage Backed Securities

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