Hi All,
Hoping I can get some insight on EM Trading desks at BBs. In particular:
- What is the skill set necessary for such a position (i.e. quant-y)?
- What is the skill set that you will develop after spending time/ starting a career on the desk?
- Are desks multi-product and then separated by region? Or multi-region separated by product (i.e. FX, Debt, swaps, CDS)?
- I am not multi-lingual (only speak English), will this create a ceiling on my upward trajectory?
- What are some good materials/books to read to get a better understanding of the space?
- What are the exit opportunities one has when working on the desk? I would assume it would be some sort of macro fund or investment manager.
I enjoy a top-down approach to investing and like the idea of being able to understand the characteristics of various economies, ultimately making investment decisions/trades off of said understanding. I have done a lot of reading on Soros & Druckenmiller and admire their strategies/perspective. Because Emerging Markets tends to be multi-product, does a desk like this help construct a good foundation for a top-down investing perspective?
Thanks!
CerebralCapital, have you checked out these or run a search:
You're welcome.
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it helps to speak the language of the product you are trading (Spanish/Portuguese ) for central/south america....Arabic for the middle east, Russian for Russia...Chinese for China, etc...
think about it...if you can't read the local language...how can you read the news feed in realtime? You'll have to wait for the translation, and then you are subject to errors in translation. Plus, you want to be able to speak to asset managers in the local country. Often, some of them will speak English, but not always, and being able to speak their language gives you an advantage.
EM is often a global macro type skillset...but also with product specific details...it can be a very all-encompassing type of skillset. Some finance specifics you can learn on the job, but its hard to learn a language on the job (unless you are one of the few who easily learns foreign languages).
Exit opps are to asset managers/hedge funds...but often after many many years on the sell-side.
Hey... thanks for this. I figured that would be the case with the languages. Can you speak to the skillset/learning curve on a desk like this? Moreover, are they any materials you would recommend reading or concepts that would be valuable to understand for someone new to this desk?
learning curve depends on the # of countries you trade and the # of products...
some people trade multiple products but only few countries
others trade one product multiple countries
generally FX/rates is one desk, credit is potentially multiple desks, and then options/CDX gets rolled in with one of those desks.
Materials? Subscribe to the emgist.com newsletter. Written by former EM strategist. Google any words/concepts you don't know. Should be good to go from there.
This based in New York, London or actual location?
What is the skill set necessary for such a position (i.e. quant-y)?
Trader = more quarry than sales Equity = not Quanty Credit = not quanty Fx = not REALLY quanty Rates = quanty Derivatives (options / rates vol): = quantier
What is the skill set that you will develop after spending time/ starting a career on the desk?
Will depend on your product. Let me know what it is and I can tell you.
Are desks multi-product and then separated by region? Or multi-region separated by product (i.e. FX, Debt, swaps, CDS)?
If you’re in location then by product, if New York etc then more likely multi product to a degree (fx/ rates together etc)
I am not multi-lingual (only speak English), will this create a ceiling on my upward trajectory?
Depends what you want to do. EM is global in nature, you don’t need language to do it, but if you don’t have an edge over those that can read the news then you’re sorta screwed.
What are some good materials/books to read to get a better understanding of the space?
To be honest it’s more experience driven since the structural idiosyncrasies across countries and time will generally invalide a lot to EM specific insights by the time it’s published (for books), and you wouldn’t really get the “vibe” of countries unless you actively visit them and work with them (for newsletters).
What are the exit opportunities one has when working on the desk? I would assume it would be some sort of macro fund or investment manager.
Depends on product - you want global macro do macro products, you want credit do credit.
Overall I think a good way to think about EM is - if you had to trade Australia / London / Japan etc (presuming you’re New York), how would you do it? What makes you so special?
Then remove layers of legal development, technology, add outright political influence, regulation on things like currency, reduce size and liquidity of markets and voila
Thanks for this. That definitely covered it all. This would be based in NY. I would be leaning toward doing credit. Could you elaborate more on the latter part of your post about going from the analysis of region/market --> technology, politics, etc. Should you prioritize one of those factors more than the other (i.e. political influence > technology), or is it all location specific and too idiosyncratic to speak to without given a specific region? Then I guess I would be curious just to hear about the logistics on a desk like this (Say, EM credit trading at a bank), day-to-day responsibilities, the balance of time spent between idea generation (if any at all) and facilitating client flow, etc. Thanks!
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