Best area to focus on in trading...

If I would eventually like to transition to a hedge fund (from a bank), would being in equities or fixed income be better? I know it depends on the nature/strategies of the firm, but do trading-focused HFs usually have both equity and FI traders? kind of a dumb question but i just wanted to have some light shed on the subject


Comments (8)

Apr 30,2010
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Apr 30,2010

Depends on the strategies the fund uses. A big place like SAC has both. A fixed-income place like Brevan Howard (also a big place) mainly has FI people. Like you said, it depends on the strategy. Figure out what strategies/products you like.

Apr 30,2010

Sorry I can't really help more than that, but you can probably figure out what you're more interested by looking at the general focus of hedge funds which tend to be either:

-value investing/event-driven. (mostly equities)
-global macro. (usually FICC)
-credit-based. (Fixed Income obviously)

That's for the strategies that aren't necessarily quantitative. Of course there's a broad range of sub-strategies within those terms and these aren't mutually exclusive. A good way to figure out what products you would want to trade is to look at the bios of traders at hedge funds you like.

Apr 30,2010

As stated before, it depends on their strategy. Your best bet is to start trading a product that you like and then finding a HF that trades it later on. Big HF trade multiple products and are kinda structured like a prop desk. There are always smaller HF that specialize in a specific products so you should have no problem finding a HF to move too.

Also, SAC was traditionally L/S equities and then they got into FICC before the crisis. Most of their losses were from the FICC so they are back to being a L/S equities HF (got this from Cohen interview in Bloomberg Magazine).

"Greed, in all of its forms; greed for life, for money, for love, for knowledge has marked the upward surge of mankind. And greed, you mark my words, will not only save Teldar Paper, but that other malfunctioning corporation called the USA."

Apr 30,2010
Apr 30,2010