How’s GBP swaption at banks for HF exit
Hey guys, I was curious about the GBP swaption desks at BB SnT, if given I want to pursue the macro pm track for MM HFs in the future.
I’ve heard GBP swaption is very illiquid and I was hence wondering how’s the outlook of this desk. If it comes to the exit for MM HFs, is this desk good? Is this product traded by HFs?
I’ve heard EUR and USD swaption are better. Is this true?
Thanks in advance!
I don’t think u get much better lol
Oh really. So basically swaption is not a very good seat for HF exit? I thought there r many HF pms trading vol😂
Reread the statement, it said you can’t get much BETTER. As in it’s one of the best sell side desks you could choose for your goals.
should rethink that vol seat if you're this acoustic
There's different types of hedge fund seats. Hedge funds are looking for bank traders that have skills that fit what they need for that kind of strategy. If you want me be a 'macro' pm that parses the Fed's words very carefully and thinks about the implications of Trump, probably you want to be on spot FX/treasuries/vanilla swaps something like that. If you go to a GBP swaption desk, you could exit to a hedge fund trading vol RV (ex: buy a cheap swaption, sell an expensive swaption as a pair). There are many funds/seats that trade vol RV.
Vol trading is a lot more quantitative and niche as opposed to big picture like macro. If being quantitative isn't naturally your talent, I would avoid rates vol desks.
Hey mate, appreciate the insights! That’s rlly helpful. I actually come from a top uni with a maths & stats degree with high GPA so I would tend to believe that the quantitative nature of vol isn’t a large problem (otherwise wouldn’t get the vol seat lol)
I kinda think the macro theme would also matter a lot for swaptions right? Cuz the underlying was still rates. Maybe what u mean is to trade rates vol is more quantitative and less macro oriented compared to liner rates and rates/bond rv?
Another reason I raised this question is that I also get the opportunity to trade GBP inflation which seems an excellent flow product and know loads of MM PMs start with inflation. Also known that there r more linear pods compared to vol pods across the market so I’m not sure if going for linear would be better for long term HF opportunity. Especially given the fact that the swaption seat was GBP which isn’t flowy compared to USD. If it’s a flow vol desk I’ll probably just go for vol.
What do you think between the two options? Thanks in advance!
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