Background in both FX and rates, happy to be a resource to whoever I can whether it's technical questions or general advice
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Is it possible to move from eFX trading to a more flow oriented FX or rates desk? I currently build a lot of models and algos for systematic strategies, but I'm finding it hard to get attention from HFs and would like to move to a more rates oriented product.
Heyo - yes definitely. If you're at a bank, there is likely logical interplay between you and more rates heavy desks, I'd make it known you're looking to maybe move, and let it go from there. eFX and flow FX tend to be pretty closely linked, I'd leverage internal network. FX and rates will overlap on the trading side once you start to talk to STIR desks, so that might be a good launching point to move more to rates
1st year analyst on the buyside trading structured prods (commercial and resi mortgages)... trying to learn more about rates given that we do a lot of hedging in the rates space; on garden leave so have some free time to study up. Two related questions:
1. Any resources you found helpful for trading rates (linear and derivs) and the sequence / order to go over them?
2. Related to that.. how important is math and stats to trading this asset class well? Is it worth putting in the hours to take classes on calc, linear algebra, stats etc.? I was a dumbo and majored in finance so never had to take math past calc 1 (aka you ask me what a PCA is and i’m a deer in headlights). Just want to be wary of return on time and effort
Never had sell side trading experience and team is very lean so a lot of the learning has been on my own. Any guidance much appreciated
Can I ask what desk you're going to? May be able to be more helpful then
Thanks for responding! What are your thoughts on the Tuckman and Siddartha Jha's books?
And should have clarified - I'm in a risk-taking seat (multi-strat HF) focused on structured products. I have a chance to rotate through the various asset classes within the sector. Right now I focus on credit, but I'm very interested in trying my hand at trading agency mortgages given its interplay with rates. My goal is to get as close to the rates space as possible within the current mandate, since that's what I'm most interested in. Helps that we even have the flexibility to put on RV, duration, and curve trades (within the rates space) if we see an opportunity - obviously not the focus of our mandate, but is a tool within the toolbox.
Very new to the trading world (lucked into this role..) so think of me as a blank slate. No sell side experience hurts me for sure, but willing to do what it takes to get up to speed
How much do you get rewarded as percentage of Pnl at BB for flow and prop? For macro products..any estimate or range
Curious how you lucked into this role from undergrad majoring in Finance? I'm curious on the backgrounds of those on your team, if you are able to share any info.
I'm in a similar area but on Sell-Side so just trying to learn more about the space as well.
How realistic are early-career moves across desks and banks? I’m a sophomore interning at a mid size FIRV shop and have an offer for next summer in a rotational S&T program at a non-tier 1 macro trading bank (think WF/RBC). I’m interested in trading rates vol, rates, FX vol, or agency MBS, and wondering how feasible it is to move to a top BB desk after a few years. If that’s possible, how would you recommend positioning for it? IE. is it better to start on a top desk at my bank and try to lateral (since macro not top desk) or start on a rates/fx desk even if it’s not a top product line. I know I’m thinking ahead, but I want to be smart about seat selection since I’ll likely have a buy-side offer from this summer to weigh. Really appreciate you doing this. super helpful!
Happy to be helpful! So...I may be uniquely positioned to answer this. My answer would be, if you're good, very easy. I moved asset classes as an analyst 3, and then banks as an associate 1 (and again as associate 2, long story). I know it is frustrating advice, but really the key is getting in the door. If you want to trade vol, you're well positioned being rotational. Hone in on that, get good at that, and try to get there full time or at least get close to them, and tell them what you want. Once you're in the door, it's pretty relationship driven in terms of getting from A to B. Moving banks is just a matter of answering a DM from a recruiter on linkedin once you're a bit more senior.
To your second question, don't get caught up in prestige. Do what you want to do - you will be better at it. I tried to be a public side FX salesperson, but it was just the wrong desk for me and I wasn't excelling the way I did in rates. Everyone knows everyone in this business, so if you are the best at a mid tier shop, you will be able to make moves regardless.
Best of luck!
How much do you get rewarded as percentage of Pnl at BB for flow and prop? For macro products..any estimate or range
Hey, I am currently on a government bond trading desk, my desk is partially unique in that we have cash traders and then quantitative traders, I am on the quantitative side which I am not liking as much as I would have thought, I am doing some pretty cool things but having a difficult time coming up with questions for the actual traders as I have no insight on how flow is on the day or why certain parts of the curve are moving in a certain direction, was wondering if you had any advice on coming up with some insightful questions that may allow me to stand out.
I am also starting to manage risk on one of the books and have made some pnl on steepeners and flatteners across the curve and was wondering if you had any advice on better managing risk for a book
Sorry if these questions are vague
Heyo - no need to apologize. It's annoying advice, but I would hit the fundamentals. Also - "why is the curve steepening / flattening" is not a dumb question, ask it! You can always do the classic watch someone trade and then ask "how are you thinking about your x risk in this?" Assuming this is a UST desk - have the auction schedule and NIM screen (set to 144A and corporate issuance) open so you can say "hey I see xx on the tape, what's our position?"
Another thing to watch is SDR - you can use it as a way to say "hey see this huge trade, what do you think it is?"
Let me know if any of that doesn't make sense!
This is great advice, Do you mind if I send you a dm, would love to give some more background on this!
I got placed on a CLO structuring desk, and would like to eventually work in interest rate derivatives, do you think this would be a move that is possible for me? I enjoy the challenge and quantitative nature of CLO structuring, an know I am pretty new to the industry, will be at the one year on the desk in September, but also want to focus more on macro markets and don’t find working with corporate bonds very interesting. I have thought about trying to go to a CMO desk,as maybe that would be a step closer to rates, and more relevant to my structuring background? Do you think that would make a transition to rates derivatives easier? Do you think I would have a better chance maybe at structured rates products,or is derivatives structuring very different from CLO structuring? What would you recommend for someone in my position?
Hi! Yes definitely possible, especially this early in your career. Honestly if you're sure you want to do rates, I'd do it as early as possible - wayyy easier to be an A2 who doesn't know something I would think of as basic than to be my level and be asking "hey how do I do a t lock". Are you trying to go to the insti side? or corps (asking given your dislike of bonds.....)
Thank you for answering, I don’t dislike bonds, I actually enjoy bonds, I just find corporate credit to be a boring part of the bond market. I think structured products and exotics are interesting, but I would also ideally like to work with a product where I could learn to take market risk. I also think mortgages seem like it could be an interesting area, but am less familiar with that space.
Hey thanks for posting this! Currently a rising college senior,have shadowed one trading desk, and networked with a few directors of S&T, none of which currently have open positions. What’s your advice on how to break into the S&T space.
Background:
Non-target finance major, 3.8 gpa, interned at a fortune 100 insurance company in product management and at Schwab for a front office role (client service specialist).
I think now that internships are wrapping up, the postings should be cropping up across the street to apply to be FT starting next year. Luckily for you, first years are generally not applying direct to the desk so it's fewer apps, but I would get in as many as you can - it's easier to move from a bottom tier bank to a top tier than into the industry itself. Ie apply everywhere you can, unfortunately it's a bit of a numbers game to get through Hirevues (which yes, are watched by us...). Honestly at the D level, folks are unlikely to be keenly aware of whether they are slotted to have a first year starting in a full year (unless they are intern manager, head of analyst program etc), they're aware of needs on the team now and what experienced hires they're looking to make.
Thank you!
I'll be interning in S&T in a derivatives group next summer. Unsure what product, group, and whether I'll be in trading or sales yet. Most likely will be trading since I'm a math major. I've started to work through fabozzi. Is Fabozzi and the credit derivatives chapter the best resource for prepping myself? Do you have suggestions for other resources?
That is very vague, almost all S&T desks trade derivatives. Don't assume you'll be in trading because you're a math major - and please please do not fall into the trap that traders are smarter / more technical than salespeople. The Fabozzi book is great for FICC in general, but without knowing your asset class
Did they give you a sense of when you'll be placed?
Fair, I know it's vague that's why I'm trying to get more info! We've had no updates about when placement will happen unfortunately. I say most likely trading because when I interviewed they asked me what area I'd be interested in and I said I'm interested in both sales and trading since I have no experience in either, but since I'm a math major I think I'd be interested in derivatives trading. They brought me into their derivatives group so I think they're willing to let us pursue what we are interested in at least to a certain extent.
Some of the people I've connected with best have been sales people. I definitely don't think one is better than the other- I've been enamored with trading for a very long time and it's been my goal.
I've been looking at Fabozzi because I'm interested in rates and interned this summer in rates trading. I've also been told by people if you understand rates well it helps your understanding of everything else so I figured I'd still gain something from it.
Interesting,you really would not say the traders are generally smarter/more technical? It seems to align with my exp tbh
Interned in equities this summer, but after reading a lot of primers it seems like I would enjoy working on something like a vol desk more. It also aligns way better with my competencies.
Any advice how I could make the switch for full time recruiting? I had a couple of calls with some traders, but all lead to dead ends.
Did you get a return? It's harsh, but a lot of people will view the lack of one as a pretty big strike. Also worth saying that most first years are hired with an intended desk but are basically viewed as "markets analyst" until you actually start, so I'd be careful on pushing too hard for a specific team
No return unfortunately. Any advice on how to navigate switching?
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