Pathway to being a good swaps trader

Hi everyone,

To cut the long story short, I’m a new analyst on a swaps trading desk and I’ve been really struggling to learn because going in I was told I will learn everything on the desk, but during the day nobody wants to talk and everyone is busy. After work, everyone is in a rush to deal with their lives and families. Only one guy stays behind and I ask him questions when I go through what happened during the day to make sense of things I don’t understand because a lot of times I get soaked up in tasks and fail to properly comprehend what is happening in the market. Recently this guy said to me and I quote, “just because I stay late doesn’t mean it’s an opportunity for you to ask me questions you couldn’t ask all day”. I do want to say I will not be good at this or I don’t have the potential because it’s too early, but I lack guidance and I don’t have a path. I know I am a very hard working guy and I am the type of guy to stay all night doing anything if that means my success. I am 8k miles away from my home and my whole life has been about sacrifices I know that I have the ethic and I have enough intellect to learn these things under proper guidance. I am making a decision to be more independent and take more control of my own learning because the dream that was sold to me that I would be taught stuff is a false one. Could you guys out there in swaps/rates trading list for me what you think one should know or be able to do by the each time in their analyst program. I’m about 2 months in I don’t feel like I do much. I book trades, I follow the hedges, and I recently learned how to do unwinds (although I have not done a live one), and I send summaries of our risk etc. My friends in other groups trade already and some do shadow pricing and hedging etc. To sum it up, I extremely behind and I am not learning as much as I pictured I would learn. In short,

  1. Could someone list the path of what comes into each stage say in 3 month timelines ideally? Including quality of pricing, hedging, commentary, franchise ability, risk taking and conceptual knowledge etc.

  2. What are the best books out there for conceptual knowledge?

  3. Best daily macro reports out there?

Thank you. Also let me know your thoughts on taking a more independent route to learning instead of bothering folks. Do you think it’s easier to learn on bigger teams vs lean teams?

 

I would speak with your direct manager about this. Best way is to get in front of him or her frequently and demonstrate you have the desire and ability, which then leads to asking for more responsibility. You basically have to be borderline annoying to do that (assuming you don't mess up any of the basic stuff like booking trades). 

One of the best ways to learn is to pitch a trade idea and your manager should let you put on the trade in small size or something, then you can watch it and monitor it. Next step after that would be having your own "strat book". 

 

Hey thanks for your response. It does seem like mastering small tasks is the way to go up and you get bigger and better things to do. However, I’ve tried to be as borderline annoying as I can but it gets to a point where it feels like it’s pestering them. It’s funny how I can look across from the next row and my friends over there are getting taught stuff all day long over there. As of pitching a trade and letting them let me put on a position, I am not quite there yet. Hopefully 1-2 months I can be allowed to hedge small trades.

 

Frankly, your desk doesn't sound very pleasant.  Perhaps it correlates with bonus season right around the corner?  In any case, I think these sort of things just take time and if you stay on the grind, you will slowly see your responsibilities expand.  You should make sure the tasks you are in charge of are done on time and done correctly every time as a start.  Beyond that, I think you need to be willing and unafraid to speak up.  For example, you mentioned shadow pricing.  I'm sure by now you have access to the pricer everyone uses.  When inquiries come in, price them on your own initiative and shout out what you see.  I guarantee the trader pricing it will instinctively shout back "agree" or disagree."  If there is a small 1k dv01 trade to price, tell the desk you're looking at it and roll with it.  I think that's the best way and you will slowly learn your way around the pricer, learn how to hedge the trades you do, and build rapport with sales and the desk.  Anyway, just don't be afraid to speak up and be persistent.  Remember that the swaps market is currently in a crisis with respect to junior people, so your desk should realistically be more willing to help than they seem to be.  Otherwise, they might find themselves without an analyst and struggling to hire a new one.

 

I have started to price inquiries along with senior guys and I’ve been getting it right. I may be allowed to do some small vanilla trades soon, path looks a bit more clearer since the time I posted this. I’ve been getting more aggressive and showing that I want to be good. I do feel like now I actually add some value especially when guys are very busy they will let me do some small stuff. Holidays, with everyone taking days off have allowed me to jump on things I don’t know how to do and figuring them out using the relevant support/resources available. However, while I do not know of many Jnr’s in swaps (almost the same in converts), I really don’t think at this point they would face any pain from losing me. Not saying I want to quit, but If I did, I doubt they would see any significant difference. I appreciate what you shared and have really been moving towards that and it’s been helpful. I’ve generally also accepted that some people are just assholes and most times it’s really not about me but about them.

 

The most probable difference is them not getting any lunch if flows are busy because they can’t get off but truly I think it’s helpful to do that stuff but very unimportant in the grand scheme of things

 

This is always a pretty difficult spot.  I'd say generally, most traders are on-call during the trading day, but there are definitely lulls when nothing's happening.  Instead of approaching traders only on an ad-hoc basis, ask them 1-on-1 if they can sit down with you after the close, or in the morning, or when it's not slow.  It's a lot less jarring for the trader to know you want to talk to him if you laid the seeds down to do that ahead of time.

Now that I'm in a senior seat, I have like a dozen things I need to do or think about, and honestly, making sure that the analyst knows basic stuff I learned like 8 years ago isn't on the top of those immediate priorities.  It's not that I don't care about analyst development, but some things require more immediate attention.  As an analyst you need to take initiative yourself to be mildly annoying and demonstrate that you care.  If people are busy and it's slow, read up, learn to use the internal systems to develop a trade idea,...etc.  Any monkey can book a trade or do back office work; that's not what they pay you six figures for.  It's too easy to just do the tasks people ask you to do and then hide away because you think nobody wants to talk to you.  Those are the analysts that get shitty raps. 

They hire you because you have a high ceiling, and one day may be a great trader.  But part of that is that you need to want it.  If you don't that's fine, but you're gonna bounce in pretty short order.  

 

I’m sorry you’re going through this. But from personal experience - I felt the same on my desk. That the manager is too busy to focus on my learning and the rest of the team is focused on their performance instead of a newbie who may or may not stay with their team.

Every once in a while, I’d chat (over text channels) with my manager about the stuff that I worked on and stuff on my plate. If something piqued my interest, I’d tell him that I want to learn more about it and ask him if he could get me the necessary exposure. For questions, instead of asking in DMs, I used team chats so anyone who’s available and knows the answer, could help. This way, my manager was also in the loop, and knew if I’m stuck somewhere.

After a while, when I learned these things, and the new analysts came in - I got asked questions by them all the time. And it’s not possible for me too, to get back to them immediately. But having been in their shoes, I try to find some time to explain things to them. It only makes my life easier in the long run.

Not sure if this really helped you, but long story short - be persistent, show enthusiasm, your manager is supposed to help you (but pls don’t be annoying), and when the time comes, pay it back :)

Good luck

 
Most Helpful

Eligendi odit velit quis odit tempora rem unde. Aut autem eos vero voluptas ut et. Ut iste et ea eius veniam ipsa odio.

Ut laborum praesentium earum voluptates recusandae qui explicabo deserunt. Et aliquid quibusdam corporis consequatur velit excepturi. Perspiciatis aut omnis repellendus quas.

Amet beatae vel maiores accusantium qui ducimus ea. Consequatur quia aspernatur ea rerum et eligendi. Molestiae illum id cum natus doloremque in laborum qui. Iusto est quam blanditiis odit.

Career Advancement Opportunities

April 2024 Investment Banking

  • Jefferies & Company 02 99.4%
  • Goldman Sachs 19 98.8%
  • Harris Williams & Co. New 98.3%
  • Lazard Freres 02 97.7%
  • JPMorgan Chase 03 97.1%

Overall Employee Satisfaction

April 2024 Investment Banking

  • Harris Williams & Co. 18 99.4%
  • JPMorgan Chase 10 98.8%
  • Lazard Freres 05 98.3%
  • Morgan Stanley 07 97.7%
  • William Blair 03 97.1%

Professional Growth Opportunities

April 2024 Investment Banking

  • Lazard Freres 01 99.4%
  • Jefferies & Company 02 98.8%
  • Goldman Sachs 17 98.3%
  • Moelis & Company 07 97.7%
  • JPMorgan Chase 05 97.1%

Total Avg Compensation

April 2024 Investment Banking

  • Director/MD (5) $648
  • Vice President (19) $385
  • Associates (87) $260
  • 3rd+ Year Analyst (14) $181
  • Intern/Summer Associate (33) $170
  • 2nd Year Analyst (66) $168
  • 1st Year Analyst (205) $159
  • Intern/Summer Analyst (146) $101
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

1
redever's picture
redever
99.2
2
Secyh62's picture
Secyh62
99.0
3
BankonBanking's picture
BankonBanking
99.0
4
Betsy Massar's picture
Betsy Massar
99.0
5
CompBanker's picture
CompBanker
98.9
6
GameTheory's picture
GameTheory
98.9
7
kanon's picture
kanon
98.9
8
dosk17's picture
dosk17
98.9
9
Linda Abraham's picture
Linda Abraham
98.8
10
DrApeman's picture
DrApeman
98.8
success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”