Career Advice Question for Options/Vol Trading: Rates vs FX at BB
Hi,
Summary:
I am new to this forum, but I will try to keep it short: I am new graduate and am in the process of considering careers at a BB in options/vol trading. I have offers from rates and fx (both options desks in the USA) and am trying to decide between the two. I would appreciate any advice. I come from a STEM background (target) if that is of any use in setting the context.
More specific questions:
1. What are some differences between the two jobs? I know there are lots of similarities, but keen to hear about the differences.
2. Are certain banks better for certain asset classes? If so, could anyone provide a brief outline of which banks are known for what? I have seen similar questions in older posts, but wondering if they are out-dated?
3. How do the exit opps to HF compare, etc.? To me, it seems like FX options is a bit more niche/lots of people trade it only as a hedge compared with rates...
4. Any general salary differences? (I guess it depends on performance, but just wondering if there are general trends)
5. Any differences in scope for use of coding? I would be keen to leverage some of the more technical aspects of my background, so wondering if a particular asset class is better suited to that
Personally, I am leaning towards rates as product seems much more interesting to me (I find it hard to care about underlying FX spot), but just wondering if the emergence of crypto is going to be a massive money-maker which could increase salary... Realistically, I won't know whether I actually enjoy/am suited to the job until I do it, so just trying to scope out some more info now.
Pretty similar products. I've noticed FX vol attracts a lot more STEM-y and Data Science-y people as opposed to rates, although rates has its fair share of quantitative people too. Rates is a lot more qualitative and subjective though. Much more intuitive than FX, which is more problem-solving.
Comp is based on desk performance and PnL - if a bank's rates vol desk is bringing in $100mm PnL vs. an FX desk only bringing in $30mm PnL, there's going to be big bonus differences.
For FX I'd say UBS, JPM, and DB are really good. For rates, JPM, Citi, GS, MS. Although most BBs should have something solid.FX is a lot more coding-heavy. Decent HF exits. Rates is less coding heavy and more high-touch (humans involved) but can entail very handsome exit opps. Rates vol trading is a highly-respected role on the buy side. It’s very far away from getting automated.