Structuring vs Sales
Any thoughts on structuring (equity der, fx, rates, cross asset, not credit) vs FICC or equity derivatives sales in terms of long term comp, progression and lateral opportunities, exit opps, and work?
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structuring itself cant make money in the long term. reason: they dont have objective formula about their contribution to the group.
But it is a very technical job(except for some sales-y structuring jobs thats nothing different from semi-sales job), so many ppl there can easily lateral to trading jobs. Or some go to sales job and become successful salesperson having very techy knowledge that original salesppl dont have. Thats what you should expect from structuring job.
What do you think about the prospects of a cross asset sales position dealing with structured products in terms of long term opportunities within the industry, exit ops, and comp? Would there ever be potential to move to investment management or trading in a multi asset or macro role?
For trading: very rare. Haven't seen many cases. (Keep in mind it's in Asia. The case might be different in other continents)
Investment management: yes have seen quite a few cases. But I think their network during the sales activity helped them exit, rather than their technical skills.
Comp Idk..its really variable so not sure you could get a solid answer on that.
Do you know what the prospects of moving from structured products trading or structuring into a HF would look like? Thanks for your advice, SB!
Following. I’m an analyst in structuring - love my job.
Long term opps very flexible in the sell-side: I haven’t decided whether I wanna be a lifelong structurer, or someday will move to sales/trading (still in the sell-side).
Would be great to hear insights on buy-side opportunities!
Job nature is technical and requires good communication to both sales and traders. I feel like Im the most technical sales in the floor and my clients are the salespeople (whose end client are the real clients).
Out of curiosity, what is ur communication like with traders? Are traders trading many structured products or are they mostly trading each leg of a structured product that u package in a structure and sell? Also do sales ever help structure anything like more pasig products such as structured notes? Lastly, what's is there much of a focus on the secondary market for structured products or is there more of a focus on origination? Lastly, do you think there would ever be a chance to move from structured products sales to structuring if desired? Thanks!
Structurers consistently communicate with traders to set up parameters (e.g. PnL margin, shifts in FX/IR/Credit curve, and other relevant adjustments) when pricing for structured payoffs to be quoted to salespeople (who will then quote the price to the client).
Depends on each bank. Bigger banks might have their own "structured notes trading desk" (acting sort of as the moderator) who will then hedge each leg collaboratively with relevant other trading desks (IR options desk, FX desk, etc) for every structured note issuance. But for medium/smaller banks with no "structured notes trading desk", then each leg will go directly to each of the relevant trading desks. Structurers act as the moderator in this case.
For structured swaps, structurers will deal directly with relevant trading desks (e.g. rates options desk), unlike notes. More sophisticated sales will propose ideas to structures and ask us to price based on their idea. For less technical sales, structurers/traders are the one who typically push the products to the sales and nudge them to promote structured notes/swaps to their clients. It is important for structures to gauge what each salespeople want to sell to their clients and how sophisticated they are in terms of structured products understanding.
There's typically more focus on primary issuance/origination, but secondary market for structured products can also be traded OTC (e.g. secondary note issuance or restructuring).
I think it varies banks to banks. My hypothesis is that it is easier to move from structuring to structured product sales than the other way around - since structures know how to use the pricing models well (since they interact with quant and traders often), while sales most often just interact with structures (and receive the price quote from structures without the need of using the pricing models).
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