FX Trading - Interested in working in this field
Lately I've been in interested in working on an FX desk. I like how it gives the potential for a high return as it is more volatile than trading stocks.
I was wondering how many traders invest their own money in whatever they trade and if anyone can share their experience working on a fx desk? Does anybody think there are more profitable desks than fx?
http://www.wallstreetoasis.com/forums/a-response-to-which-desk-is-best-…
With regards to trading in banks, it's pretty much illegal to trade in your account, especially if it's from information you've gathered at work. As far as I know, no one that I work with does this behind the compliance's back. But really, why risk your money when you can always risk the shareholders' and you are getting paid in bonuses? :)
Of course, you can invest your own money if you were trading in a hedge fund. Not sure how it works with prop trading firms.
x
People think FX is a very volatile product to trade because they mistakenly forget the massive amount of leverage associated with retail FX trading. This is not to say that there are not some volatile currencies. But in general this is not the case.
FX Trading - Benefits/drawbacks of FX? (Originally Posted: 10/27/2009)
What are the benefits/drawbacks of FX trading? So far I'd say benefits I'm aware of are the macro focus, drawbacks are that the market is going all the time. Since bid/ask spreads are so low, how do you make money? Is it very profitable in general? What does it "prepare" you to do, if anything (ex: hedge funds)?
You would be correct in stating B/A spreads are small in most Majors in spot FX, but consider that it is not unusual to have notional trades in the billions flow through the desk in one trade. So while the spread is small, the shear volume is massive. Also keep in mind there are many currency pairs with much wider bid-ask due to the less liquidity.
Traders in Spot often take a decent amount of proprietary positions, which is another common way to make money in FX.
On the options side, the Bid-Ask is wider, and profits are made off flow and hedging, along with the occasional prop trade.
Like any product, its hard to say whether it is "very profitable in general," however the market is massive and its hard to see how it could ever go away short of a global currency. Especially with the plight of the dollar and potential shift in what is the global reserve currency, I think FX will be an interesting place to be for years to come.
From a sell-side desk, you can easily move to a Macro HF (ex BH,SFM) and would also likely be able to work for any global company, since they almost all have some sort of FX risk they want to manage.
by a few larger players in the game worldwide. DB, for one.
FX is a volume business. A lot of shops act as market makers for smaller ones and take a cut off the spread. For these kinds of shops, there are usually more spot traders than prop traders.
Many shops try to formally distinguish between 'spot' operations and 'prop' operations - meaning different individuals working on each function. The most profitable, aggressive traders I've come into contact with do both and are very 24/7 intense. Think multiple (insert your favorite data feed such as Bloomberg/Reuters here) screens in multiple rooms of the house. They also often work closely with global macro research heads of funds or scheme with HF managers.
FX has a lot of other functions off the trading floor, such as currency hedging, protecting operating profits or corporate treasuries. Very versatile yet underutilized 'asset-class' in my opinion...
It can be profitable if you have a great strategy and good money management but it's very tough. I would suggest livetradingdemo.com if you wanna become a successful trader.
First off, most banks are helping hedge large amounts in future periods where the liquidity is much harder to get and thinner. Not taking 10,000 to 1 leverage on a overnight play on the euro before a fed meeting.....stop watching those late night infomercials.
Not sure where you heard this whole thing about higher return than equities? Granted I guess if you were short spanish peseta during times like when Nick Leeson blew up barings, and you had major major size you prolly made out pretty well.
FX Trading - What does the future hold? (Originally Posted: 05/11/2013)
Just wondering what you think of FX Trading? i.e. is it a good thing to get in to? Who are the big players? What's the future look like for it? Anything you guys know would be much appreciated. I'm ranking desks for a BB internship, and I'm thinking I'd like to go into FX but it would be good to find out more. Thanks!
It's not a bad desk, though the FX capital is in London. Spot tends to be shrinking from what I understand due to electronization, but spot traders will still be needed. If you can get on FX derivatives and especially EM, then those are pretty good. Top 4 players in order are: Deutsche, Citi, Barclays, and UBS.
It's very profitable if you know what you are doing.
DB and Citi have been killing it in FX as of late (pretty sure DB is always at the top.) From what I know spot is shrinking a little (but won't go away) and FX derivs outside of G-10 currencies is a good place to be.
If I'm at one of the top four players (Deutsche, Citi, Barclays, or UBS) would it be worth trying to get FX over something else because of how well positioned my bank is?
You need to ask yourself: 1) do you want to be in sales or trading. (why? because some shops are run by sales, some by trading)
2) if trading, do u want to be in spot/forwards or options. (why? options is a much better seat, anyone who tells u different is lying)
3) careful listening to people telling u that EM FX derivatives is the place to be... the market is pretty shitty in things like MXN and basically all latam, excluding BRL. for color... yen books (G10) have been doing well this year for obvious reasons..
just a starting point....
Would you be able to tell us which shops are run by trading and which by sales? Have heard citi is a trader shop but how about the rest?
To OP: take the euromoney rankings with a grain of salt. The top 4 (DB/Citi/Barc/UBS) not necessarily all great at options tho some of them are
Also depends on what the bank in question is hiring for. They may not be hiring interns for options, and only spot or vice versa so keep that in mind.
I think the high frequency trading desk may be taking an intern. Would this be good to pursue?
Career in FX Trading / Asian NDF's (Originally Posted: 07/10/2012)
I have an interview for a FX Trader position. It is a FT job offer from an big Korean investment bank in NY for a junior fx trading position. The senior trader briefly mentioned that the position would also involve executing non-deliverable forwards in the emerging markets (KRW, NTD, CNY).
I would most appreciate advice on: What are my duties for this specific job? How does FX Trading differ from Bond/Equities Trading? (Where do we FX Traders make our $money ?) What possible interview questions will I be asked?
Would I be executing spot/forwards/futures for clients, as well as proprietary trading?
Thanks
Interesting. So you guys are saying that FX is fairly stable? Working off of "higher volatility = higher possible returns", would one be correct in assuming that there isn't that much money to be made in FX? Clearly, if you are a good trader you will make money, but where does the allure of trading FX come from?
click on the link. Money can be made trading anything.
Also, I didn't post that link as a a "Do fucking search" comment, more of "a person can't answer it better than this" comment....just for clarity.
FX trading is first and foremost about precision and not making mistakes. you'll be expected to quote prices quickly and accurately and update clients accurately. Because of the speed and the sizes and sheer number of orders there is less room for error. FX execution trading is a great training ground. how to think and how to move. It teaches you how markets and clients react to news, how what is happening in one product can affect another, and most of all the importance of being accurate and exact. It is less sexy than equities, but still great for raw skills. it is one of the few products left where you can take a view with the bank's capital, so naturally there is going to be talent there that you can learn from.
FX trading - Big players? (Originally Posted: 09/25/2012)
Hi everyone,
Long time lurker, first time poster. I'm interested in spot FX trading. Can anyone tell me who the big players are in the space? I've heard that Sun Trading is pretty big -- anyone else? Are any of the hedge funds in the space? If you happen to work in this field, then please let me know!
Thanks fxhopeful
Oh, wow. I didn't know a lot of the information that you guys posted, thanks.
I always thought DB (and UBS/BarCap) made tons of money from FX and was targeting a job with them down the road since where there's money to be made, good compensation normally follows.
@Gekko21: Sorry, my fault.
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Jefferies just acquired Bache not too long ago. I know Jefferies Bache FX is expanding if you're looking for opportunities.
Thanks for the info -- I appreciate it. I guess I'm just curious who the big players are in this space, especially high frequency.
Is Jefferies Bache FX a big player?
http://en.wikipedia.org/wiki/Primary_dealer
yep that's how I thought you intended it lol
Whats a career in FX trading all about? (Originally Posted: 12/18/2011)
To everyone who has worked/has any experience/has any knowledge/has any friends who work/have worked as an FX trader or interned in FX before whats it all about?
What kind of base pay can you expect? What kind of Bonus could you expect? is it hard to cake in FX?
I've heard that at some banks FX trading is the easiest segment of trading to get into compared to equity and derivatives, is this true?
As always any insight is appreciated!
From what I know, bonus is roughly 10-15% of you what you kill. Markets are tough right now when headlines are going every direction but trending markets are easier to make money in. I only interned on a desk so can't speak too much about the business.
How was it while you interned there? would you consider working in FX full time?
What makes you think it is easier to break into?
Base pay is same as everyone else. Bonus can be more, less or the same depending on the year. I have no idea what you mean by hard to cake.
Never thought it was easier to break into until a work friend of mine made the claim, hence why i'm curious to hear some stories and opinions from WSO
truee and what i mean by hard to cake, i mean how hard is it to walk away year end with a hefty bonus compared to working on other desks....
It's no easier to break into. As far as bonuses doesn't really matter what desk you're on they are going to suck.
Easy to walk away with a hefty bonus?? If you are asking a question like this I think you have some growing up to do.
Actually in FX we are allowed to trade our own product in our PAs, since no one really gives a hoot about it (or commodities either).
Also, just to put in perspective, a few days ago when people were in Euro-zone crashing mode EURUSD was trading around 15 vols, whereas SPX was something like 22 vols (these are just indications).
That's definitely depends on the bank. I know a few BB FX guys that trade their own FX PA account and they keep getting into trouble....they were threatened with disciplinary action and they had to stop, although I wouldn't be surprised if one or two got around it.
DB runs shit in FX, but their profits dont come from huge bets, instead tons of F50 companies as clinets. Trades they hedge and come up with creative solutions for those clinets.
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