What will be the next hot area in Markets?
So over 2004-07 credit seemed to be the hot area of Financial Markets, lots of the most hardcore grads running to the Structured Credit Trading desks playing with CDOs and ABS', until that all blew up in their face.
Right now the hot area seems to be commodities, the ever-soaring oil price being a daily headline, with precious metals also a sensible investment in these markets.
What do you think will be the hot desks/areas of the future? Will exotic credit trading make a comeback in 5yrs, with lessons learnt from the subprime bubble? Will a new area within derivatives take centre stage?
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Continued advances in Equity
Continued advances in Equity derivatives. Structured Notes, continued rapid growth in options trading.
"Oh - the ladies ever tell you that you look like a fucking optical illusion?"
What about insurance
What about insurance derivatives? They are probably never going to be near the scale the OP is refering to (exotic credit etc.) but thay could become an interesting area.
I know at least one of the big inter dealers (ICAP) has invested a sizeable amount of resources building an insurance derivatives broking platform.
What do you guys think about
What do you guys think about carbon credits and such?
i think insurance
i think insurance derivatives will also be hot given the upcoming pension fund crises. also many banks are building platforms and indices (jpmorgan, credit suisse, goldman sachs) to help build a market. wouldn't be surprised at all if they were the next big thing.
Ill buy carbon credits and
Ill buy carbon credits and sell insurance derivs as to what turns out bigger.
"Oh - the ladies ever tell you that you look like a fucking optical illusion?"
Not sure about carbon
Not sure about carbon credits getting big anytime soon. Didn't work in europe because the quotas were set ridiculously high...emissions quotas weren't fully used...spot tanked.
Governments need to put a bit more thought behind these ideas because they haven't actually reduced emissions. But it's definetly one for the future.
wrong about carbon
Umm emissions is a pretty decent market in Europe right now and NYMEX is starting a contract at the end of this year. Not sure where you're getting this info...
Yeah seriously, emissions
Yeah seriously, emissions trading has been expanding rapidly in Europe and now the US and Canada want to catch up (but won't for many years it seems).
emissions has been expanding
emissions has been expanding rapidly as is evident in the increase in price of seats on the CCX, but it is tough to say whether it will be around for good or whether it's just a fad.