Best Trading desk for HF Exit?

Interning at a BB for trading next summer, wondering which desks will put me in the best place for HF exit? BB is top 3 in just about all products, so more just wondering from an educational perspective. I am a Econ/Finance major, so I can’t handle anything too technical CS-wise.

 

How would compare the following: rates options vs equity options (either single stock or index) - assuming no market preference between the two? Additionally, how would you compare those with linear rates trading?

At the BB I am at, the best people consistently go on equity vol or rates - not credit, FX, or commods.

 

Rates vol by far. Equity vol people get seats in good shops all the time but that's a recent phenomenon as there were some decent PNLs in the last few years. Rates vol can also get you a seat in both RV teams and in macro ones. Equity vol is generally only good for RV as most equity guys have no idea about monetary policy (I say that as an equities vol guy). Rates vol also seems to have more opportunity due to market being pure OTC and only having a few counterparties. Like you have to outsmart about 20 other people instead of all the PhDs working for on-exchange market makers like in equity vol. 

 

As an equity vol trader who switched to more macro products you are exactly right. EQ vol guys make little bits of money and then either kill it or get blown up by left tail events (20/21 markets) and all of a sudden the winners become the hottest commodities on the market. It's a hard product to scale in as you don't have great macro intuition and the distributions you trade are very fat tailed so you can never trade large enough size. People see 100+mm PLs in 2020 but can never replicate that size (with one exception perhaps).

In rates/OTC products you can make a much better steady state living and the space is less competitive.

 

As an equity vol trader who switched to more macro products you are exactly right. EQ vol guys make little bits of money and then either kill it or get blown up by left tail events (20/21 markets) and all of a sudden the winners become the hottest commodities on the market. It's a hard product to scale in as you don't have great macro intuition and the distributions you trade are very fat tailed so you can never trade large enough size. People see 100+mm PLs in 2020 but can never replicate that size (with one exception perhaps).

In rates/OTC products you can make a much better steady state living and the space is less competitive.

Also the distributions you trade all have correlated tails. So if you want to get true diversification you can only do super low capacity ultra-RV stuff. If you get the hang of those you can make consistent mid-8 figure PNLs, I know a few people at that level and it's not a bad lifestyle. But they're far in between and can't go higher than that (with a few exceptions), there are lots more people doing mid-8 and even 9-figure PNLs in rates on a consistent basis. As in, if someone tells me "such and such guy has made 100mm+ PNL every year for the last 5 years" I pretty much always assume they do rates RV or that they're one of the few people who know how to do macro where most of the PNL seems to come from rates.

 
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Yeah it's all one factor at the end of the day. Some RV stuff is scalable sure but hard to swallow for large multistrats as the mark-to-market vol tends to be large, especially vs. expected PnL of structures. Comparatively in rates you have rates curves in every currency with central banks in different parts of their cycles. Your EUR steepener has limited correlation with your AUD basis position and both can be sized to make 7 figs. 

 

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