what does mortgage/mbs trader do daily

Mortgage/MBS traders typically engage in activities that revolve around analyzing, pricing, and trading mortgage-backed securities. Here's a breakdown of what their daily responsibilities might look like, based on the most helpful WSO content:

1. Daily Tasks:

   • Monitoring market movements and news that could impact mortgage rates and MBS pricing.
   • Executing trades and managing risk on their book.
   • Communicating with sales teams and clients to provide market insights and execute client orders.
   • Reviewing and analyzing prepayment speeds, interest rate movements, and other factors that affect MBS valuations.

2. Junior Trader Responsibilities:

   • Assisting in building and maintaining models to value MBS and assess risk.
   • Automating repetitive tasks to improve efficiency. For example, using Python, VBA, or SQL to streamline manual processes like data analysis or report generation.
   • Learning to use internal libraries and tools developed by quant teams, often implemented in languages like C++.
   • Supporting senior traders by preparing trade ideas, analyzing portfolio performance, and conducting scenario analysis.

3. Coding and Automation:

   • VBA: Often used for quick automation tasks, especially in Excel-based workflows.
   • Python/SQL: Increasingly important for more advanced automation, data analysis, and integration with internal systems.
   • C++/Quantitative Tools: While not always required for junior roles, familiarity with these can be beneficial for working with quant libraries or more sophisticated trading strategies.

4. Skills to Develop:

   • Financial Modeling: Understanding yield curves, prepayment models, and cash flow analysis for MBS.
   • Programming: Python and SQL are highly recommended for automating tasks and handling large datasets.
   • Market Knowledge: A strong grasp of fixed income, credit, and relative value (RV) trading concepts is essential.

If you're aiming to break into a mortgage/MBS desk, focusing on coding skills (Python, SQL, and VBA) and building a solid foundation in fixed income markets will be highly beneficial.

Sources: Q&A: BB Fixed Income Trader, 2nd Year Analyst, Interview with a Senior Software Developer for a Prop Trading Firm, Preparing for a Jr. Trader/Desk Assistant Role, Learning to code via MBS valuation, Q&A:Commercial Banking SVP Ask Me Anything