Ask Me Anything: BB Equity Derivatives Trader

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So since most interns are about to start their summer programs or are in the first couple of weeks, I thought I would open a forum for anyone to ask their any questions/worries they might have. I can only reply in the context of trading/sales internships but i'm sure others can chime in with their bits of knowledge. Bio: Non target, BB Equity Derivs Trader, author at Salesandtradingcareers.com Also, make sure to see my post "Do's and Dont's as a Trading Intern" from earlier this year. Piece of advice #1: Do not underestimate the value of a graduate offer, there aren't many to go around and there are even fewer for non interns.

Comments (59)

 
Jun 17, 2013 - 4:51am
Thanks so much for doing this! I'm in an S&T rotational program. An MD (who deals with the interns on my desk) frequently asks me what I "really want to do." How should I answer this question without 1) being completely dishonest (would be pretty obvious to see through, I think) and 2) risking not being considered for full-time on my current desk?
 
Jun 17, 2013 - 6:35am
cowabunga111:

Thanks so much for doing this!

I'm in an S&T rotational program. An MD (who deals with the interns on my desk) frequently asks me what I "really want to do." How should I answer this question without 1) being completely dishonest (would be pretty obvious to see through, I think) and 2) risking not being considered for full-time on my current desk?

The key thing here is to be able to get a read on the guy. I know some guys who when they ask that question you should be honest and say "golf pro" etc, because they want something along those lines as well. I remember a guy on my internship who just wanted to go sailing, and with someone like that it is ok to talk about the things you would do if you had infinite wealth. But unless you are completely sure about that the best way to answer that is for example "ive always been passionate about golf, but im passionate about trading as well, the way I see it I can try my hand at trading as a career and play golf as a hobby, but couldnt really do it the other way around". Something along those lines I find makes you come across as interesting but also shows you are making smart decisions, are interested in trading as a career etc.
 
Jun 17, 2013 - 12:26pm
I don't really know a lot about S&T, but I always wanted to learn more. A couple kids from my school in non-quantitative majors (History, Government, Economics) landed summer positions at BB's in S&T. I'm assuming these were more on the "sales" side of things, because from what they told me their interviews were not really technical at all..no crazy brainteasers..none of what I usually hear on this board. Did the interviewers just go easy on these guys, or is this something that's relatively uniform throughout the industry for non-STEM majors looking to get into S&T? Thanks
 
Jun 17, 2013 - 6:17pm
Fill or Kill:

What is one likely to be given to do (SA) on a spot FX trading desk at one of the FX giants (DB/Citi)?

Spot FX is one of the more "old school" desks in Fixed Income I'd say. So expect to do a lot of go-fer-ing. You'll probably be shadowing a lot, paper trading, maybe even booking trades.
Jack: They’re all former investment bankers who were laid off from that economic crisis that Nancy Pelosi caused. They have zero real world skills, but God they work hard. -30 Rock
 
Jun 17, 2013 - 7:02pm
panda123:

Thanks!

What will be the tasks of a Sales Intern?
Afaik client contact is not usual for interns.

you will def not be having any client contact on the phone, mainly for the reason that there are a lot of regulator restrictions on what interns can do. You will be allowed to sit in some client meetings but chances are you wont get to talk to any on the phone. I spent a rotation on a sales desk, and really the main things the sales intern did were: -sitting with everyone possible: this is crucial for any intern, one of my projects on the sales desk was to get to knopw as many peoplke as possible -Calling guys on your team pretending they are the client: at first this is quite nerve racking, and you do get a grilling, but after a couple you find a stride and its actually a very useful exercise. -pitching trade ideas in a presentation format to the guys on your team To be honest sales internships are very much geared to how you can present ideas. In the end, you will be hired to talk to clients on the phone, so they will be looking you can do that.,
 
Jun 17, 2013 - 7:05pm
Swifty:

I don't really know a lot about S&T, but I always wanted to learn more. A couple kids from my school in non-quantitative majors (History, Government, Economics) landed summer positions at BB's in S&T. I'm assuming these were more on the "sales" side of things, because from what they told me their interviews were not really technical at all..no crazy brainteasers..none of what I usually hear on this board. Did the interviewers just go easy on these guys, or is this something that's relatively uniform throughout the industry for non-STEM majors looking to get into S&T? Thanks

There is always a chance to squeeze in without really getting into technicals. For general programs (ie Sales and trading not just one or the other) you can go through all your interviews and only meet sales guys, in which case the interviews might be less technical than if it was with traders, but its still not guaranteed. That said, interviews will generally be tailored to the candidate. There is not much point asking a history major very quant brainteasers, but Id still expect to get technical, market awareness and some brainteasers.
 
Jun 17, 2013 - 8:42pm
derivstrading:
panda123:

Thanks!

What will be the tasks of a Sales Intern?
Afaik client contact is not usual for interns.

-sitting with everyone possible: this is crucial for any intern, one of my projects on the sales desk was to get to knopw as many peoplke as possible

So true. Even on a trading desk this is a big deal, especially if the desk is large or it's your last rotation.
 
Jun 24, 2013 - 4:54pm
Thank you very much, there are always very helpful. 1.) Do you consider your self trading Equity Derivs in the future? What are the exit opportunities like? I spoke to a guy who was an Asian Equity Derivs sales guy who said the exits were dreadful, perhaps he was just talking about sales and not trading. Thank You.
 
Jun 24, 2013 - 5:35pm
What is it like to be a BB - OTC derivatives trader? Currently am working for a custodian bank and am processing all trades for GS Asset Management, PIMCO, BlackRock. I want to move to a company/desk that deals with trading these instruments as opposed to just processing their trades. Any insight is greatly appreciated.
Because the only thing that motivates me is money
 
Jun 24, 2013 - 6:18pm
derivstrading:
cowabunga111:

Thanks so much for doing this!

I'm in an S&T rotational program. An MD (who deals with the interns on my desk) frequently asks me what I "really want to do." How should I answer this question without 1) being completely dishonest (would be pretty obvious to see through, I think) and 2) risking not being considered for full-time on my current desk?

The key thing here is to be able to get a read on the guy. I know some guys who when they ask that question you should be honest and say "golf pro" etc, because they want something along those lines as well. I remember a guy on my internship who just wanted to go sailing, and with someone like that it is ok to talk about the things you would do if you had infinite wealth. But unless you are completely sure about that the best way to answer that is for example "ive always been passionate about golf, but im passionate about trading as well, the way I see it I can try my hand at trading as a career and play golf as a hobby, but couldnt really do it the other way around". Something along those lines I find makes you come across as interesting but also shows you are making smart decisions, are interested in trading as a career etc.

i am not trying to hijack, but i have to disagree respectfully with this one...i think if i asked that question and someone said anything about golf or sailing i would really be turned off. i am not on the sell-side and never have been, but in a junior person I am looking for someone who is laser-focused...i suppose its just about knowing who is asking the question tho.
 
Jun 24, 2013 - 6:26pm
Bondarb:
derivstrading:
cowabunga111:

Thanks so much for doing this!

I'm in an S&T rotational program. An MD (who deals with the interns on my desk) frequently asks me what I "really want to do." How should I answer this question without 1) being completely dishonest (would be pretty obvious to see through, I think) and 2) risking not being considered for full-time on my current desk?

The key thing here is to be able to get a read on the guy. I know some guys who when they ask that question you should be honest and say "golf pro" etc, because they want something along those lines as well. I remember a guy on my internship who just wanted to go sailing, and with someone like that it is ok to talk about the things you would do if you had infinite wealth. But unless you are completely sure about that the best way to answer that is for example "ive always been passionate about golf, but im passionate about trading as well, the way I see it I can try my hand at trading as a career and play golf as a hobby, but couldnt really do it the other way around". Something along those lines I find makes you come across as interesting but also shows you are making smart decisions, are interested in trading as a career etc.

i am not trying to hijack, but i have to disagree respectfully with this one...i think if i asked that question and someone said anything about golf or sailing i would really be turned off. i am not on the sell-side and never have been, but in a junior person I am looking for someone who is laser-focused...i suppose its just about knowing who is asking the question tho.

yeah i think it all depends on the person's personality and your relationship with them derivs answer certainly would seem to fit in some cases, but with more conservative superiors / or superiors you don't have a strong relationship with then no

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Jun 25, 2013 - 2:03pm
If someone is interviewing for a position and they say they want to trade equity derivatives how much knowledge would you expect them to have? Same with saying you want to trade something like exotic swaptions or something random, is it expected that in an interview you'd need at least a solid understanding of a product because they would give you questions about your understanding?
 
Jun 26, 2013 - 2:18am
yeeman:

If someone is interviewing for a position and they say they want to trade equity derivatives how much knowledge would you expect them to have? Same with saying you want to trade something like exotic swaptions or something random, is it expected that in an interview you'd need at least a solid understanding of a product because they would give you questions about your understanding?

I personally would expect them to have a good base ofknowledge if they were just coming for a trading interview in general, let alone them saying they want to trade a certain product. I would find it a bit ridiculous if a person said they want to trade equity derivs and then not being able to talk about the greeks. I personally look for the candidate to have interest in the topic, so I will look for candidates that have read around the topics. I dont want to be explaining what delta hedging is in the interview, if you are interested in equity derivs how have you not already learnt about this on your own? The best interviews ive had is where we can go into a discussion about more technical things. As a rule of thumb, I would like a candidate for an equity derivs job to have read things like: Sinclair's book, Taleb's book etc. and then in that case I would use the interivew to ask questions whose answers you couldnt find in any textbook, and see if the guy can apply the knowledge from the books.
 
Best Response
Jul 1, 2013 - 3:31am
el-diez:

Thank you for this AMA. What do you think about switching from market risks to trading? Is this possible?

I find that in general advice on this site is too close minded when talking about moving between departments and people say "it cant be done" etc, but when it comes down to it, its all about making a connection, there being a spot open and the person who is hiring liking you enough to take you. I have friends who got interviews with FO desks out of BO just because they ran into them on a night out and just came across as solid guys that they would want to spend 10hrs+ per day with. Moving between departments id say is first how personable you are, and only then how smart you are. There is no easy way of doing it, all that can be said is try to network your way in, hopefully a spot opens up and your name will be in the discussion.
 
Jul 1, 2013 - 7:00am
I don't think it's all that ridiculous to say you want to trade equity derivatives (especially if you come off as a quanty person) even if you aren't terribly familiar with the granular details of trading options. Should you know what the greeks are? Sure. I read up on the definitions all the way to Volga and vanna after seeing those terms mentioned by FXTrader on this site. Do you need to know the profiles of the greeks beyond delta, gamma and Vega to get hired? Not in my experience. I also had no idea what it meant to make money delta hedging when you were long gamma. I think the key is not to come off as if you know a great deal because they can easily ask you enough questions to make you crumble. Rather, go in there with the attitude that you don't know a ton but have some interest and are willing to learn and work hard...
 
Jul 1, 2013 - 9:39am
whalesquid123:

I don't think it's all that ridiculous to say you want to trade equity derivatives (especially if you come off as a quanty person) even if you aren't terribly familiar with the granular details of trading options. Should you know what the greeks are? Sure. I read up on the definitions all the way to Volga and vanna after seeing those terms mentioned by FXTrader on this site. Do you need to know the profiles of the greeks beyond delta, gamma and Vega to get hired? Not in my experience. I also had no idea what it meant to make money delta hedging when you were long gamma. I think the key is not to come off as if you know a great deal because they can easily ask you enough questions to make you crumble. Rather, go in there with the attitude that you don't know a ton but have some interest and are willing to learn and work hard...

I 100% agree that you should not come in thinking you know everything, but that doesnt mean you shouldnt know quite a bit about the topic. And me (as well as all other interviewers I know) will ask more and more difficult questions until I find that breaking point or limit of your knowledge about the subject. This is often when the interviews really start, because it becomes about critical thinking on the candidates part rather than regurgitation of information. But trust me, it leaves a lot better of an impression if this breaking point comes talking about the different ways to hedge your dividend risk rather than what delta of an option is. There is a lot of competition for very few spots, and there will usually be a handful of candidates who really know their stuff, now a lot of these might have faults in terms of personality etc etc, but you want to be one of those that knows their shit.
 
Jul 1, 2013 - 9:40am

Q&A: Ask me anything, former BB trader (Originally Posted: 10/10/2013)

I did one of these in the past but I think it fizzled out, mainly because i was travelling at the time so didnt really find the time to reply. Saw that a couple of these have generated interest so figured will give it another shot now that I can reply more regularly.

Background:

Non target, traded at a BB for a couple years, moved over to an HF (one of the mainstream ones) to a completely different product.

Considering interview time is coming up, feel free to ask anything. I can be very open about the BB experience, unfortunately cannot discuss the HF gig much/at all except for very general details.

If anyone knows my identity please dont reveal, otherwise I will have to shut down my account.

 
Jul 1, 2013 - 10:13am

You would be surprised what a 1 trick pony can do as an equity derivative broker.... If your 1 pony is a BB and you cover the entire desk you only need 1 client. You will have your entire desk feeding off you!

"Oh the ladies ever tell you that you look like a fucking optical illusion" - Frank Slaughtery 25th Hour.
 
Jul 1, 2013 - 10:15am
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