Most up and comming product?
If you want to go into trading and be ITM for the next decade or so, which product can offer that?
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ITM?
in the money
most products are far too cyclical to be "itm" for 10 years. Each desk and product might have an awesome 3-4 years, and then a downturn.
One could argue that getting on some sort of derivitives desk could offer high profitability for the next 10 years, due to higher margins and lack of liquidity in some of the markets.
I think you should stop worrying about which desk could make you the richest, and just find a desk thats willing to take you on and teach you the business.
Yeah, without a doubt my main concern is actually getting onto a desk. I would just like to go into interviews having an idea of where I would like to work.
I'm thinking credit default swaps. But CDS growth has been precipitious, and who knows if the top is close? I know some of you guys are actually on desks, so I was wondering if you could add any insight? What type of product is emerging and looking like credit derivatives did 10 or 12 years ago?
At my bank close to 50% of our business is in structured products and almost 80% is in derivatives (they overlap obviously). All of our desks focus on derivatives work, so saying you work in "derivatives" is very vague these days. And I would argue that a number of desks can be "ITM", as you put it, for quite a while as long as there is volatility in the underlying product, and as long as you do a decent enough amount of hedging for corporates to keep you going in the rough times when hedge funds and other investors stay on the sidelines. As an example, I'm in commodities. There will come a time when hedge funds cut back on their activity, but it won't affect our overall desk that much because we do so much work hedging for corporates. And if your underlying product remains volatile then corporates will always be looking to hedge. And CDS's aren't even really considered derivatives anymore (even though they technically are). At a number of banks CDS's are part of credit flow trading, not credit derivatives trading. I mention that only to show how quickly the world is evolving on the trading floor and how structured things are becoming.
So what products are considered credit derivatives besides CDOs?
funny thats the nickname your mom gave me
1) yes, cds trades like cash bonds, or at least they should. no suprise that CDS growth has been as high as it was; that'll happen when banks do 10 years worth of hedging in 2 years. 2) jackdole your focus is at least a little bit off. choose your jungle guide before you choose your product
I think the most profitable derivatives will continue to plain-jane puts, calls as well as the newish CDS.
All it takes is a few people to see flaws in a market and make the right trade to take advantage of the inevitable correction.
This doesnt happen often, but when the opportunity strikes, a few people will make boatloads.
what does "choose your jungle guide before your product" mean?
having a mentor is key
Jesus, no fucking sense of history.
upcoming vol posed by end of qe2 and austerity measures should make rates quite interesting
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