Got two offers from S&T, any suggestions?
two strats roles from two similar tier BB. One offer is on EQ Delta one desk and another is Rates Desk Electronic Market Making. I assume the first one will be heavy in product and the second one more in programming. I have listed several cons and pros for each role and would appreciate any more insights!
EQ role
pros:
1/ really friendly team (enjoyed a lot with their interview) and responsive manager
2/ wide range of team responsibilities and thus more dynamic working content
cons/concerns:
1/ I have never worked in an EQ role, so not sure if provides me the market exposure I like
2/ not sure about the exiting opportunities (buy-side and sell-side internally)
Rates role
pro:
1/ my background is more fixed income-leaning and I like rates as it is more macro-oriented.
2/ serious software dev exposure. As I used to be on the modeling side, such exposure sounds interesting to me. (I am from non-cs background)
cons:
1/ electronic market-making emphasizes understanding client behavior patterns more than market dynamics? From this perspective, it sounds more like data science than finance to me
overall I am passionate about market dynamics(how the market moves, the activities happening, etc). Both roles are new to me so I cannot really tell which path suits me better. Any insights will be helpful! Thank you:)
You are right. Rates electronic mkt making is programming / data science oriented. The “trader” on the desk is more like monitoring, providing advice on the algo and doing manual trades when its necessary. The competition is fierce and it’s hard to make money if the bank is not big/famous enough.
Thank you for the input! It is a tier-one BB so I think it should be relatively mature and competitive? May I ask what do you think of the learning opportunity here, compared to other desks?
If u r quite interested in programming, it will be a great opportunity to see how to implement a good trading system (if the bank already has) or how to put thoughts of a typical human trader into code.
In some banks, you can also learn mkt from voice traders. But depends on the relationship with them. In some places voice traders see algo as enemies
I enjoy coding but pure software engineer is just not where I am passionate about. Thanks!
D1 equities has a pretty poor trajectory going forward. I think between automation and overall increases to indexing and passive investment, you're going to see less good flow (retail, size private bank) and more adverse flow (HFs, indexes rolling,...etc). I would probably stay away from this desk unless you really like the people. I would also expect comp in equities to be lower than in rates broadly (although at an analyst or early associate level it probably doesn't matter too much).
EMM is a bit of coding, but a lot of understanding how a system works, and making sure the plumbing on it is working correctly (making sure your data feeds are good, risk management is correct, the hedger isn't doing something wrong,...etc). I think there is more long-term upside here compared to cash equities, and I think having a tech-adjacent role will be significantly better for exit opps. EMM is definitely steeped in markets, but it think from a very micro structure. Clients flows and broad themes aren't really the focus for it.
I think between these two, rates is the clear winner unless you really hate the team / job. That said, I think it might be good to have a chat with both groups, and try to get a sense of what day-to-day is like to get a clearer picture of what you're getting into, while also giving you some peace of mind.
Thank you so much for the elaboration! The D1 role will focus on eq derivatives but also starts to cover cash eq. And you are right the bonus range is lower than rates. I really like the eq people but I think that's a bonus point, not a key factor. I have talked to both teams and it seems to me that the eq one has more focus on pricing, pnl analysis and inventory optimization, which I have a rough idea of why and what to do; while for the eRates side, there are serious software dev work, model and signal design type of work, which sounds really new and exciting to me but to be honest a little bit scary for someone from non-cs background. Since they extended me this offer so I guess it is not sth totally out of my capability and as a junior joiner I will have guidance, but still I am not sure what to expect. I guess I will take the challenge after all.
Maybe the nomenclature is different at my bank, but my understanding is that Delta One means just that - no options, and 100% linear. I would just double check that by "derivatives" they don't mean vanilla equity swaps (which are technically derivatives, but will basically the same as the stock), and actually use vol / correlation products.
May I ask why trade flow matters for the brokerage business since it is earning commission not spread?
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