BB derivatives trading analyst - buyside opps?
Hi all,
I recently accepted an offer as an incoming analyst at a BB for equity derivatives trading. What is the outlook for buyside recruiting down the road in this role? Should I vie for the more structured/quanty side (exotics, var/vol swaps)? Should I get into more macro products (index) or micro (stock options)? More generally, do L/S HFs focus on the single stock derivs guys, while index guys get picked up by global macros? Not really sure how the whole buyside transition works in equity derivatives, if it does at all...Not stressing about this since I really like the group and think I'll fit in there, but I'm just curious about prospects down the road.
I came from an equity derivs (vanilla background). Tbh the exit opps arent great in terms of natural fits.
In terms of exotics vs flow, id say exotics doesnt have too many buyside opps because that product space is a very retail driven space, not many HFs that im aware of (someone correct me if wrong).
There's not many exit opps to fundanental strats (i.e. L/S) because you dont get much fundamental analysis training, its just not that useful on a sell side derivs flow desk.
So really your exit opps are vol arb funds.
Id say moving to the buyside is more a question of using the skillset you learn and applying it. I went from a vol desk to a more credit based role but I did it quite early in my career, and was a case of 1 step back to go 2 steps forward.
Why is this??
bump
I came from an equity derivs background and I think the consensus is if you're looking to jump buyside, try to end up in exotics/structured products more than vanilla. After that it's a crapshoot
Don't have any exp, in trading but know just a little bit as I have read on WSO and discussed with industry people. I think if you end up doing vanilla equity derivs, better to stick there for a while and move to some other areas within derivs. You really will have much better feel once you spend a few months on the desk. In decent time you could go single name equity derivs to exotics or credit and so on, all within derivatives. Not being too ambitious but one might be able to do this in 6-7 years on the sell side depending on circumstances.
Another thing that might be useful is to develop more quant and structuring skills. You are worth more to the buy-side as a trader with quant and structuring skills v/s a pure trader who is used to having quants on the sell-side assisting on projects. This will also allow you to consider start-up funds. You might also find room in a macro based environment. Vol arb stuff for some reason (cuz I don't know much about it) sounds risky, have seen a few start-up funds blow up in past couple of years. Hence better to have more skills and product experience pre switch.
As derivstrading above pointed you won't get trained on fundamentals on sell-side. But if you make it a habit to read stock research it will also allow you trade equities from a very opportunistic point of view without going into deep value stuff and will compliment your equity derivs trading as well throughout your career.
My suggestions are keeping in mind that you want to be a risk taker on the buy-side from day one and not an execution person with hopes of one day risking your funds capital.
thanks for the responses, interesting that exotics might be more valuable for the overall skillset but not intrinsically due to the product itself because of the retail focus.
To be honest you have virtually no exit opps to buy side other than being an execution trader if you stay in that group. Was a volatility trader out of school
What exits did you look at?
Aperiam vitae qui dolor ut eum architecto vero. Quod ut qui non pariatur. Soluta animi velit neque.
Ea et possimus dolor exercitationem earum quia dolorem cum. Est fuga minima quod dolor aspernatur aut. Cupiditate possimus sunt qui voluptas ipsa placeat et. Laudantium nemo id vitae et repellat suscipit.
Corrupti error autem temporibus magnam laudantium aut consequuntur ipsa. Et minus quis harum cum sit. Sit quia voluptas eos quia ut ut architecto.
Quas qui amet vel qui commodi. Perspiciatis ab non possimus explicabo est iste odit voluptas. Quia et doloremque et et molestiae et. Voluptatem delectus nostrum quidem error et et. Consequatur doloribus incidunt natus velit modi amet. Omnis consequatur amet hic culpa aut ea deserunt deleniti. Et pariatur omnis facilis est voluptates ut.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...