Top macro trading desk to choose for FT?
Would appreciate some thoughts on this. I got into markets from a STEM background mainly due to a macro/rates interest in trying to understand the drivers behind yield curves, monetary policy decisions, and so on. That said, I’m also trying to weigh future job security, PnL potential, and exit opps down the line.
My options are:
- Government bond trading, where I like the tangible macro exposure but am slightly concerned with the longevity of the career/automation risk and (potentially?) limited PnL opportunities
- FX vol, which is doable with my STEM background, but I don't think has the same macro thinking (rather than more conceptual mathematical reasoning). It also seems like FX vol is more pigeonholed as a product and likely has fewer HF exits?
Trying to keep a long-term perspective in choosing between these desks, what other factors than those above should I consider? I appreciate any views, especially from someone in macro trading who have seen themselves and their peers end up on different paths after starting out on different desks.
rates desk for sure
Disagree. Would go FXO 100%, but obviously consider how strong your bank is in each
How come?
I would agree with this and go with FXO. I work on an options desk and there’s are multiple benefits to this desk. You are still extremely macro, you’ll have an edge having true options trading under your belt. Not to mention you trade rates on this desk quite often due to the inherit IR risk in FX. You’ll trade IR swaps to hedge rates position, take a view, or hedge vol posi. In addition you trade xccy basis and swaptions.
So you get true trading experience in a variety of products that give you more opportunities to go buy side if that’s what you want especially at these multi-strats. Not to mention it’s still extremely high touch and much less automated than a vanilla rates desk. Just my opinion, and do agree take into consideration the bank you work at and where they rank in each product.
Mind if I PM for a related question?
This is a tough one, options are important to understand and most buy side macro PMs use options one way or another and those ones that come from a linear background would be keen to hire vol-trained juniors to help them. Especially in FX, a lot of them like doing directional punts with light exotics so if you understand well what goes into the pricing, how is vol vs skew driving the risk-reward, etc that could be a good way to sell yourself. N.B. when it comes to vanilla vs exo you should always pick vanilla if you have a buy side exit in mind. That said, I've seen more people exit to risk taking seats from linear rates than from FXO.
In the grand scheme of things this is a good problem to have. Both career paths are good and I'd go with whichever looks more interesting to you. To get a feel for the products and the type of analysis that goes into them check out this github which is filled with research for different asset classes:
https://github.com/yieldcurvemonkey/Curvy-CUSIPs/tree/main/research
Agree with this. For the sake of explanation, the "vol vs skew is driving risk reward" refers to something like: if skew is priced for puts over and it richens then maybe want to do put spread / EKO / etc to see some of that rich vol (same thing for skew pointing for calls over). If the structure has net vega exposure, then are you buying/selling vol off a high or low base...
Mind if I PM for a related question?
Hey, thanks for the response. Could I please PM about something related?
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