Starting on trading desk after being in Compliance

Starting on a trading desk after transitioning from compliance is a significant achievement—congrats! Based on the most helpful WSO content, here’s some advice to set you up for success:

General S&T Advice:

1. Be Assertive and Proactive:

   • Take on as many projects as you can handle to provide value to the desk. Your goal is to free up time for senior traders so they can focus on producing.
   • Ask questions when needed, but be mindful of timing. Traders are busy, so gauge when it’s appropriate to approach them.

2. Build Relationships:

   • Networking is crucial. Use your onboarding program to connect with people across the organization, especially on other trading desks. This will pay off in the long run.
   • Make sure MDs and senior traders know who you are, but do so humbly and without being overbearing.

3. Absorb Information Like a Sponge:

   • Write everything down. If someone teaches you something, ensure you can answer questions on it later. If you need to be taught the same thing twice, it may reflect poorly on you.
   • Review your notes daily and research anything you don’t understand. Having a grasp of foundational concepts (e.g., Fabozzi for fixed income) will flatten your learning curve.

4. Desk Mannerisms:

   • Always ask the desk what time they expect you to arrive in the morning and follow their lead, even if it contradicts HR guidelines.
   • Be all hands on deck before market open and stay sharp until the desk slows down.

5. Stay Humble:

   • Confidence is good, but arrogance can backfire. Stay grounded and focus on learning.

Product-Specific Advice for Preferred/Convertible Bonds:

1. Understand the Basics:

   • For convertible bonds, familiarize yourself with the interplay between the bond and the underlying equity. Learn how to evaluate whether a bond is rich or cheap based on credit and volatility assumptions.
   • Preferreds often have unique features like callability or fixed-to-floating rates. Understand these nuances and how they impact pricing.

2. Leverage Models and Tools:

   • Convertible bond desks often use models to assess vol/convert arb opportunities. While you may not be building models initially, understanding how they work will help you contribute faster.
   • Keep an eye on TRACE and other market data to track bond flows and adjust your markets accordingly.

3. Focus on Relationships:

   • Trading illiquid bonds often relies on relationships. Know who holds what and build rapport with counterparties to find the other side of trades.

4. Day-to-Day Workflow:

   • Expect to spend time keeping up with flows, negotiating between buyers and sellers, and finding prices where you can risklessly cross and make the spread.
   • Be prepared to assist with trade analysis, coordinate with middle office teams, and handle busy work like P&L reconciliation.

5. Stay Sharp on Market Trends:

   • Keep up with macro trends that impact fixed income and convertible markets, such as interest rate movements, credit spreads, and equity volatility.

Final Tips:

• Remember, your desk wants you to succeed because your success benefits the entire team.
• Use your compliance background to your advantage—your understanding of regulations and risk can be a valuable asset.
• Stay curious, work hard, and don’t be afraid to ask for help when needed.

Best of luck on your new role!

Sources: https://www.wallstreetoasis.com/forum/trading/converts-trading?customgpt=1, Advice I give to my incoming analysts, Advice I give to my incoming analysts, Do's and Dont's as a Trading Intern