Is interest rate derivatives trading a good desk to be on?
Hi Everyone, just wanted to get an idea from those that may have some experience working in interest rate derivatives, what's the future like there for both sales and trading aspects of the job?
Thanks
It's mega good if you are trading this at a prop shop. Not so much at IBs but still decent.
What do you mean by this?
Hi AlienTrader, would you kindly explain your thoughts? Is it because prop is always better than making markets at a IB?
Hi Alien, could you elaborate on what IR derivs trading entails? not very familiar with the space at all
It's just market making for IR swaps, swaptions, and IR-related structured products.
Yes, I think this is a good space to be in. It's complex enough to not be completely fucked by automation like a lot of vanilla FICC products, but it's not so illiquid that it's being completely fucked by regulation like credit/mortgages. Basically one of the few places in FICC that's kind of safe in my opinion, but on the other hand the upside may not be as great should things turn around for other products. You never really know what product is going to be hot until it's already hot.
As for the kid saying prop trading derivs is necessarily better, I would say that the buyside in general is in as tough of an environment as the sell-side and having a top 3 investment bank on your resume looks a lot better after two years than a prop shop if you want to do anything other than trade. Again, it's a risk vs reward thing. Your reward can be a lot greater starting in prop but your downside risk is also much higher and if you want to trade that's something you should be able to conceptualize.
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