Central Risk Book Trading
Don't know much about this desk:
1) do you gain a valuable skillset? 2) what are the exit opps? 3) is there internal respect for the desk at a BB?
Thanks!
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ex central risk book trader, now dervis trader here
1) do you gain a valuable skillset? Programming yes. Finance no. 2) what are the exit opps? Quant / strat 3) is there internal respect for the desk at a BB? No, it is glorified developer position
Man, here is sth u gotta now. Central risk book’s goal is not to find alpha but increase efficiency. Central risk book in every sell side bank is LOSING money. It is a cost center not a revenue center. If you are a quant in this desk, at least you get to learn to how to program an optimizer using MOSEK. But usually that’s job of PhD. But if you are a trader, then ur job is not meaningful since you can’t do prop position. I am still able to do some prop position as a voice trader but not in central risk book as any positive income from this desk may raise doubt from regulators.
So in short, stay away from this desk unless this is your only choice.
J
why were you guys using mosek?
Haha that's a very good description... I still remember of the one at my previous bank. Constantly losing money and people working there looked like people coming from Mars
Losing money is normal in many banks now. It suck to be trader in some banks because you can’t trade discretionarily. Even though you know you have good trading idea just you are not allowed to trade it
I've seen that Citadel has hired a central risk book PM from one of the larg London investment banks to run their central risk book. They've also added a few PhDs to this group, do you think at Citadel it would be different in terms of renumeration and career ops?
I will say much better than sell side. Central risk book desk still suck even at citadel because it focus on execution. But the reason I say it is better is because you are more likely to build relationship with people who likely open their own funds later.
here is one thing I learnt after 8 years of careers in fund and bb. Unless you are in prop, the best way to find good trading or investment job is through relationship. Go work for smart people, and leave good impression to them. Being the first person they think when they need to hire. Most of people who get jobs through headhunter are doing worse than that.
sadly sell side smart people have to deal with a lot of politics. In the end, nowadays, people who made the top at sell side not because they are good at trading or investment but because they are good at politics
Central risk book is not really a trading job. The goal is to reduce transaction cost and provide more natural liquidity instead of making money. Like all other trading jobs, there is no such thing as exit option. You either trade a different product (Very hard to switch desks now because of zero job opening ) or doing sth else (developers, quant for example)
Heavily depends on the bank. Some of them are super infrastructure development-focused.
All sell side central risk book are cost center not revenue center. If they make money, then regulators will suspect they are doing prop.prop trading is still not legal for large inst. So they are doomed to lose money. Period
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