Vol Desks - Updated View
What are the prospects like from the different vol desks in macro, specifically fx vol vs rates vol vs CDX vol. What are the pros and cons for each? What are the best desks across the street within each product? Are any of them significantly less desirable than others for buyside?
get a job there first man then ask. chances are you wont be on any of those.
FX & rates are different than credit, so hard to compare across those. Rates & FX are obvious feeders to macro HF, whereas credit has slightly wider application (but I defer to experts). CDX and rates vol probably the most complex of those three (as non-linear underlying) so probably better to start there for choice.
CDX vol can have macro element just like EQ index vol, but is different than rates & fx. These are good desks, but slightly within own niches.
Rates vol is generally better seat than FX options (within DM) imo as rates more technical product, and there are a lot more risk takers in that asset class. Within FX, x-JPY is best pair to trade (unlike some other DM stuff which is basically choice market)
Thanks! And what do you think about EM? Also any colour on best banks for each?
Not overly familiar with EM so can't be of much help unfortunately (re product or bank). Others will be better suited to comment.
my impression (fwiw) is that EM rates options are not super liquid and probably better off trading EM linear rates (where at least you have the cash, IRS, xccy & tenor basis). I'd think that EM FXO & EM linear rates have more going on than EM rates vol but I could be wrong.
However, EM markets have a lot more information asymmetry between locals and people outside the country. I think it is a big benefit if you speak the language for the region you're trading. Not necessary, but I can think of a number of cases where that is very useful.
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