How hard is it to switch asset class in the career?

randomaxHi All:

I am currently working in the research department of a structured products desk. I've been in this role for around a year and a half and am thinking of moving to trading. Anybody have any inputs about how easy it is to move across asset classes? My primary interest lies in commodities trading but I'm sure it's extremely difficult to make this transition. However, I'd still love to hear suggestions from people who think it's doable or better so, if they have done it themselves.

I am also considering structured credit trading. Does any body have any inputs on what all falls under structured credit, what are the growth areas and what the working hours are like? Although I am passionate about the markets, I also value my personal time and would think twice before getting into a role which requires 12+hr/day. I guess synthitic CDS would have better hours than say CDOs?

Any inputs are very much appreciated.

It's possible. All CDS is synthetic.

Out of curiosity why do you fancy commodities so much?

I recently left commodities for something else.

For your question, from structuring you can pretty much move to any asset classes you want depending on the tpe of structuring you have endured ofcourse.

hi chimp may i ask what u left commodities for? I'm looking for a commodities internship now and would like to know i'm currently doing FX though. I want to give commodities a shot cos it's more intuitive, less rubbish and a little more volatility.

less rubbish?

is a hot emmerging sector and that's why I find it very attractive. Lot's of room for innovation, new products, same is the case with credit. I'm just concerned about the average hours on the credit desk versus commodities. As a side note, I'm in research and not in structuring. Havn't heard of a lot of people making that move across asset classes. Chimp: Why exactly did you leave commodities?

Thanks for your inputs.

Why I left commodities? Its too cyclical. I was on the natural gas desk and this volatility you speak of is not really consistent...almost non existant presently...though that might change in no time if we get thrashed by something like katrina again, also hard to make decent coin in the absence of volatility...specifically in natural gas..Im only voicing this opinion from a natural gas perspective...might be different for other classes.

Plus eventually i want to move to buyside..inv management and my natural gas experience wont be of much benefit then...thus the switch.

ChimpTrader ... with lower volatilty, have you seen an increase in structured commodity products like collateralized commodity obligations, which can leverage the lower volatility? Would those products be traded on the commodities desk?

alongwith lower volatility, theres also hardly any liquidity nowadays specifically wrt natural gas contracts. Liquidity is what brought amaranth down...though amaranth itself was too big for the entire market...sometimes youd be hard pressed to enough liquidity for even vanilla stuff let alone structured stuff, so the highly structured products atleast wrt natural gas hasnt caught on yet. anyone else in energy or commodities care to chime in?

amaranth crashed because of their failure to take into account the liquidity risk in their risk models. In 2005-2006, tons of hedge funds and even BB prop desks were playing the natural gas game? Why? Katrina. And Arnold made a killing soley on the expense of amaranth, as did JP being amaranths prime brokerage. Hunter has started a new fund recently..Solengo and poached a buddy of mine off my previous desk, so my buddy knows him well. Hes a cool guy, very down to earth...wouldnt invest a dime in him tho! :P

it seems like the commodities game is too hot. you know when everyone talks about it and everyone and their mom wants to get in ... ie ibanks. I think when the first couple of fucked up structured transactions blow up a few of the banks, they'll get burned and look to go elsewhere (phys transactions that is).

Plus, nat gas volatilities will prob decrease significantly given the large amounts of new storage fields, LNG, and pipe expansions....

That's just my opinion.

In terms of commodities, I think petrochems and distallate trading are starting to get hot.