Advice on recruiting
If your long-term goal is to work on the buy side in global macro, which starting point sets you up better: a TDP at an oil major, or a strong rates/rates vol desk at a bank?
Obviously, both are great opportunities — and step one is getting an offer. But I’m trying to focus my recruiting efforts efficiently.
Now a second, related question: Is the idea that starting on the physical commodity side gives you a better grasp of commodity flows, which could offer an edge when trading commodity derivatives at a global macro fund?
depends on the bank
Goldman rates vol is a diff story to some MM vs BP
Yes I understand that. So what if you would have the choice between BP TDP and goldman rates vol?
In general, do you think there are more top seats at BB rates desks then there are seats at top TDP programs (Shell + BP?)
i’d say goldman in that case - there are more macro funds/seats focused on rates/fx than commodities + ur more likely to interact with said people from goldman + goldman pays more to start with
only do BP if u really want to do commodities (tho it is prob the best seat to start with )
If your long-term goal is to work on the buy side in global macro, here's how the two options stack up:
TDP at an Oil Major:
Strong Rates/Rates Vol Desk at a Bank:
Second Question: Does starting on the physical commodity side offer an edge for trading commodity derivatives at a global macro fund?
Yes, starting on the physical commodity side can provide a significant edge in trading commodity derivatives. Understanding the physical flows, logistics, and market dynamics of commodities gives you insights that are often overlooked by those with purely financial or derivatives-focused backgrounds. This knowledge can help you identify mispricings or inefficiencies in commodity markets, which is valuable in a global macro context. However, to succeed at a global macro fund, you’ll need to complement this expertise with a broader understanding of macroeconomic factors and cross-asset relationships.
Final Thoughts:
If your primary focus is global macro, the rates/rates vol desk might be the more efficient starting point, as it aligns more directly with the skill set and experience global macro funds seek. However, if you have a strong interest in commodities and are willing to put in the effort to broaden your macro knowledge later, the TDP at an oil major could also be a compelling path. Both are excellent opportunities, so your decision should also consider your personal interests and where you see yourself thriving.
Sources: Calling all Physical Commodity TRADERS: Benchmark indices and physical commodity trading risk, HF exits from macro vol desks?, Physical Commodities vs Buyside ER, Physical Oil Trading Basics (Part 1 of 2), Physical Commodities: Shell vs. BP vs. Trading House Grad Programmes
It’s funny how this site talks about rates vol like tons of people trade it when there are well under 50 good grad seats trading rates vol per year.
It isn't just the rates vol people that are moving to hedge funds though
Correct… which is why also funny when people on this website talk about rates vol as if it is the only good product to trade
Not really. All rates traders can move to hedge funds (cash, swaps, inflation, vol, STIR). I think there are more linear rates pods than rates vol pods (but feel free to correct me).
There are certainly more linear rates pods than vol pods; however, a rates vol trader inevitably learns to trade both linear and vol products whereas a linear trader will often never touch a swaption. Rates Vol is certainly a better place to be for HF recruiting. Similar scenario for macro credit-they will work with CDX/ETF options and tranches, but also linear rates, rates options, and equity futures for hedging. This puts them in a fundamentally better position for buyside recruiting than linear rates as well. My personal opinion would be rates options (flow seat or gamma pod, not exotics), macro credit (vol/tranche seat, not linear) and commods (more niche exits) are the best places to be for buyside recruitment. Don't have personal experience here, but have heard agency mbs, equity index vol, and delta one are also decent. Distressed credit desk analyst is also good for more traditional credit shops.
Can't imagine STIR or repo is great...would you recommend Treasuries or swaps if I can't land a vol seat? How about Treasuries/swaps vs Agencies? Recognize depends on the bank, but assume they are both tier 1. Also, how is XVA trading compared to these three? Have heard they work across credit and rates derivatives spectrum, but didn't know how it was viewed from a buyside perspective. FX options, macro credit, and commodities have good interns already, so I cannot move to these.
Lol it’s so funny for anyone who’s actually been on a trading floor …I interned in gs/ms/Jp this summer and the “rates vol” desk was like 10 traders and that’s including more structured/exotic stuff. Like this ain’t IB where teams are super big and there’s constant need for juniors.
so what's the advice then? try to land any seat possible instead of focusing on rates desks?
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What about linear rates
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