Insights on Fixed Income Trading
Hi everyone,
I'm interested to learn more about fixed income (FI) trading desks.
I’d really appreciate hearing your insight into how FI desks typically operates/are structured… some specific questions could relate to:
- What attracts people to FI trading?
- What keeps traders on FI desks?
- The good (and/or bad) elements of FI trading.
- What you think about the short- and long-term outlook for FI?
- A 'day in the life' of someone working on a FI trading desk
Thank you for reading this far. And if you have thoughts or experience relating to FI trading, it’d be great to hear from you!
I think it'll be easier for people to answer if you have specific desk in mind.
The linear rates trading desk is going to be different from options desk which will be different from the HY desk. But i would consider those all FI desks
do you have an idea of what is linear trading rates ? I may have an offer for that desk but I struggle finding informations on what it really is
Linear rates from my understanding are non-option related products. Cash treasuries/TIPs, interest rate swaps, futures etc. Corps and HY will be traded by a diff desk
Incoming sa in fixed income s&t at a bb so take it with a grain of salt. Because im a bit of a contrarian, I'm attracted to the job because just not that many people are interested as everyone still seems to get into tech, vc, pe, ib and l/s investing and anything that isn't fixed income. In my opinion, a lot of these fi products have huge markets and volume such as agency mortgages and very few juniors pursuing these opportunities. As a result, I think it's going to be a great place to make money going forward if one decides to spend their career specializing in the field.
I interned at this mm for snt this summer that everyone shits on this forum and their exits for fixed income was insane. Basically everyone went to multi-manager hedge funds on teams that they specialized in. Second I would say I like the job because I have more of a quant background so the approach to fi just makes sense to me. I think the drawback tho is you are very far removed from the actual things you buy as fixed income and securitized products in particular are much more far removed from the actual collateral or underlying than private equity or activist investments.
Would love to hear takes from more experience people in the space as im looking to start a career!
good job man. I found it interesting how u specifically stated being 'far removed' from the assets u buy as a drawback. Why would it be a drawback? Maybe cuz it makes analysis more veiled and non-linear, as in analysis of the underlying product doesn't equate to the trades in your book?
I mean that for instance that bonds typically do not move as closely as the equity to the underlying operating conditions of the company but also that due to the nature of securitization where you have hundreds of individual loans in the portfolio, it is inherently more abstract and math/structure driven than your typical stock. I would say this could be a bad thing for certain people. But again the spectrum of fixed income snt is so wide that you can specialize in distressed and high yield as well which is similar to equity analysis.
I just got a CMBS Capital Markets analyst role with their intention to promote me to a junior bond trader. Im starting in two weeks, I really like macro economics but I love real estate. It’s disappointing to hear how far removed you are from the underlying. Have you encountered any people who join PERE or maybe development or even brokerage after trading?
Mind naming the firm?
Bump
I’m a first year on the agency mbs desk at my firm. I recruited for a job in fi because there seemed to be very few juniors that wanted to pursue a career on a flow desks. I believe that it is becoming harder to get jobs on muni/corporate/hy desks because the spreads are getting so tight. The spreads in agency mortgages are tighter as well but that market is much harder to automate than other desks. I think if you’re wanting to pursue a career on a flow desk, agency mbs, or even other structured prod desks are a great place to start. I am by far thr youngest one on my desk and it is clear there is a lot of room for growth. I’d also recommend taking a look at some esoteric abs desks which aren’t as high volume but are much closer to the actual collateral than most other structured prods.
Answers from someone in mortgage trading -
Curious as of which FI product desks are better in terms of profitability and exit opps -
I'm currently an incoming rates structuring FT analyst. Some people been saying structuring is a non-front-office job, etc. I'm thinking what exit opps I might have, and whether I need to internal transfer to other desks first.
you would transfer bc of what other ppl say? do what you want to do..
Vel voluptates ut eveniet omnis omnis. Qui sit quis neque nam omnis nihil ut. Omnis sequi consequatur nobis quidem.
Voluptas voluptatum vel ad voluptas porro rem at. Saepe quia rerum quo beatae. Ducimus alias in voluptatem blanditiis rerum ducimus. Veniam vero reprehenderit asperiores earum quia quia nesciunt. Placeat deleniti sit nesciunt non. Qui alias velit consequatur itaque consequatur temporibus sunt.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...