Best Products to Trade
I am simply curious, but people seem to think equity and FI trading sucks. I realize the best product to trade would be the one you are most interested in but which products are widely considered to be the most interesting/desireable to trade?
"people seem to think equity and FI trading sucks"
what are you exactly talking about? are you implying only FX and commodities are fun to trade?
this is inherently a dumb question. I assume you mean what are the "hot" products right now. Well, it doesnt really matter, because that changes. Structured credit was hot, and now, not so much. if you are given the choice of which product to trade, pick a product that you are happy to read about 15+ hours a week. personally, after spending a few days on the desk, i thought swaptions would be an awesome product to trade. for better or worse, i didnt end up on that desk.
I thought you were going into energy for the summer...
I am, I was just curious. I saw a previous forum where people gave FI and equities a hard time so it just got me thinking
please share what that was you were thinking?
I worked last summer building models for a swaptions trader. They may not be hot, but I found them fascinating too. I'm hoping I'll get to work with them again once I start FT.
comes down to your preferences re micro vs macro (ie credit vs rates), speed (cash equity vs structured products), etc. plus the people matter too. there is no best or worst product.
Damn, I feel like this isn't that hard. If your dream firm told you you get to be a trader, what product would you choose and why? Assume you have no trading experience and are fresh out of undergrad.
distressed debt
The problem is that was not your question, you asked what "which products are widely considered to be the most interesting/desirable to trade." They are completely different. Some people love pouring through a companies financial statements and projecting earnings or determining creditworthiness. I do not, I find macro products interesting, like Swaptions, etc. It depends on the person, obviously what is good for one is not necessarily good for all. Do you like prop or do you prefer flow? These are all questions that need to be considered imo.
On a separate note, who said equity and fixed income trading sucked? And why?
Here is the forum...
http://www.wallstreetoasis.com/forums/why-do-people-not-want-to-trade-e…
[quote=aggiebanker]Here is the forum...
http://www.wallstreetoasis.com/forums/why-do-people-not-want-to-trade-e…]
lol @ my rant with Ideating... The one I had with Badam was 10x more hilarious tho.
I think you misinterpreted the thread. If you were to ask most people here, Vanilla equities would probably be low on their list, but equities has a lot more than that, including derivatives. Trading is certainly not for everyone, but it definitely doesn't suck (though the environment and firings do suck right now).
Cocaine
I agree with bateman on how to assess yourself on what your interests are. Basically its micro/Macro, Fast/Slow, Quant/Qualitative, Liquid/Illiquid
I prefer a very liquid fast paced environment hence why I enjoy equities. You can also get into some very complex strategies within equity such as stat arb, risk arb, Relative Value, mean reversion etc.
Which products are more qualitative than quant? Also, isn't there a general correlation between how fast a market is and its liquidity?
Equities/stock index futures on a relative basis would be more qualitative.
Credit/commodities - blend of quantitative and qualitative
Rates/FX/derivatives/exotics - more quantitative
Yes the faster the market the more liquid was just putting it into broad terms for people to understand.
i would say rates are a mix/more qualitative rather than more quantitative
As was said comes down to the specific interest of the person. We could do a survey on WSO and find the most wanted desk between members, but if you used that to make your decision it would be a very stupid thing to do.
As was said, some people like pouring over financial statements (high yield credit), some like very macro oriented stuff (govt bond trading) etc.
Personally, I like options because i just find it interesting. I knew after i read my first options book that it was the product I wanted to trade. I just think there are a lot of ways you can make money with options (although a lot of ways to lose as well)
Best Products to Trade? (Originally Posted: 11/15/2013)
Just wondering what products will be in the most demand/profitable and will still require a presence of a human trader going 10 years into the future on the sell side. Based on my understanding I am thinking something along the lines of mortgages, swaps and repo trading. If there are any traders out there I would greatly appreciate any recommendations.
bump
Best Product to Trade before Moving to Global Macro HF? (Originally Posted: 12/23/2010)
Can anyone shed some light on what the best product to trade is on the sell-side with the intent on moving to a global macro HF after 2 years?
it is also worth mentioning that by quantitative people mean you may have to understand more complex models, concepts, and higher order risk factors. the shit you learn in a math degree, while certainty quantitative, will mean jack shit and will be useless on a trading floor. i know this is said time and time again, but Hull IS the best book you can read.
and yes, cash equities on every trading floor i have been on attracted generally the same kind of person. Loud, crude, and overweight. the classic trader in many respects. they also tended to go out and come in drunk to work the most.
i am more cerebral so would get eaten alive on a cash equities desk (and almost did). i work with structured rates products and that is where i belong.
Rates and FX although a lot of the macro HF trade mortgages, commodities, equities, credit--basically all the products.
I agree with Gekko. I don't know your educational or trading backgorund, but rates & fx would be your best bet to hit the ground running. It will allow for you to get a broader economic FEEL of what causes the other markets to tick.
Happy Trading
quantitative analysis is a technique for analyzing securities. People put money to work using quant strategies in every product. Likewise, other analysis methods like fundamental analysis, technical analysis, etc are used by traders in all products. I work with a 95% qualitative group of traders and we trade rates, FX, stock indices, credit, and commodities. At my firm we also have quant groups that trade all of these products.
Which is the best asset class to trade (Originally Posted: 06/04/2013)
Which is the best asset class among FX, ABS ( including CDS, MBS, RMBS, CMBS etc.), Equity, Commodity etc, to trade, for the trader joining the industry withinin the next 3 years, so that it can make exorbitant amount of money. I would appreciate if I could get pros and cons and the comparison which would not just help me but other aspiring people also who wish to become a successful trader some day.
You sound like you have your priorities in the right place.
pokemon
best product to trade? (Originally Posted: 01/30/2011)
Which product has the most growth potential/gives you most options 10 years down the road? I assume derivatives in general provide better exit opps, so are some derivatives better than others? Thanks in advance for your input!
Very individual specific and too cyclical to try and predict. The main exit opps for a products is a fund/hedge fund dealing in the same product.
Long story short, no one can answer this question.
Nice pun, always appreciated
this is like saying what sport to play when your an athlete, you do what your best at, which will give you the chance to be most successful
http://www.wallstreetoasis.com/forums/a-response-to-which-desk-is-best-…
[quote=Gekko21]http://www.wallstreetoasis.com/forums/a-response-to-which-desk-is-best-…]
It's almost like this should be stickied or something...
Best products for those starting in S&T (Originally Posted: 10/17/2016)
What products do you anticipate will be hot over the next few years? Which desks tend to have the best exit ops and most transferable skills?
Electronic trading will grow outside of its current world (right now it's mostly equities, FX, and futures at the big banks) as more products become standardized and centralized on exchanges. The algorithms you sell on e-desks aren't always the simplest things in the world either, so learning to communicate those concepts to clients is a useful transferable skill.
They've all got their pros and cons though. It depends what you want out of an exit op (i.e., prime brokerage could help you get into a non-quantitative hedge fund but it definitely won't help you become a prop trader the way working on an options desk would).
I’m inclined to agree with VolSurface regarding the growth of electronic trading, regulation has pushed many more products into standardized contracts and onto exchanges since 2008.
In terms of asset classes, I really feel that Interest Rate Derivatives could be set to grow in terms of headcount. Most IR derivatives desks are fairly streamline after rates being held so low for so long. If the Fed actually get on with the long awaited hiking cycle, I see growth in IR deriv. demand from hedgers, thus a growth in headcount.
Just my $0.02
Physical nat gas
news to me buddy -(guy who works in phys natty)
when just starting...it almost doesn't matter...you just want to be in a market that moves and has volume.
So, cattle futures would be a BAD place to start....as would subprime collateralized CDOs...because neither trade very often...so there is little opportunity for you to learn about the price discovery process.
Best places then would be -equities -govt / LIBOR interest rates -energy (crude oil, nat gas) -FX
(spot, futures and options for all of these markets)....When you move out to the more esoteric stuff....you get pidgeon-holed into a product. Not necessarily a bad thing if you are very good...but if a market stops trading...then you just twiddle your thumbs and wait.
100% agreed from a trading perspective
I would also note that technology and regulation, to an extent have bifurcated the market. If you're on a more vanilla/flow driven side of the market, realize that you will likely go electronic in some way or another over the course of your career. If you're on the more exotic side of the market, know that while the products may become simpler, the individuals who survive will by and large become more and more quantitative. Also as balance sheet becomes a scarce resource, there's been growing demand for traders in roles like equity swaps or XVA in fixed income. Some might say this is a fad.
From a sales perspective, think about where you get your edge and what you enjoy. Someone with average people skills but above average quantitative ability or product knowledge may be better suited for something like a derivative or structured sales role. On the other hand, those with superb interpersonal ability may want to focus on a desk that is less transactional and focused on client relationships like research sales or parts of PB.
If you could pick one product to trade, what would it be? (Originally Posted: 11/14/2017)
If you could pick any product to trade right now, what would it be? Just interested in the answers people give - feel free to be as broad or specific as you want.
Cryptocurrencies and LNG
Financial Product with Best Future / BAML S&T SA Desk Recommendation (Originally Posted: 04/21/2014)
Hi,
I would like know your opinion on which financial product/trading desks in general have the best job opportunities; in other words, desks that are going to stick around, that banks aren't likely to eliminate in the future, and that are looking to hire. For example, a lot of banks are scaling back their commodities trading so that might not be ideal.
Also, any recommendation on a BAML S&T desk? I have a SA offer and would like to know which desk would offer the best chance for me to get a FT offer. It doesn't matter what I trade, main goal is a FT offer.
Thanks in advance.
I'm no expert but based on previous comments here it is a bad idea to base the decision of which product to trade with on which would give you the best chance to land an FT offer. Also I am not sure if there's any correlation between return offers and certain desks.
In every period (2-3 years or more I guess) a different kind of asset class is booming, and obviously nobody could predict the next one. Therefore, go with the asset class you think you'd enjoy the most, it is important.
I'd advise to keep yourself away from spot desks (like cash equities for instance) as it is more likely to be computerized overtime and there is not much you learn from them, and you should also be asking yourself how good you are at math, so maybe you could go into some more quant products, which often has bigger job safety.
Would you know BAML's most profitable/strongest trading desk or a list of what each bank's forte is in terms of desks?
According to the 2013 Coalition rankings, Baml was #1 in G10 credit, 2nd in Munis and tied for 2nd in securitized products, between 4th and 6th in FX and EM, and 7-10 in g10 Rates
TRADERS - How did you decide on your product (Originally Posted: 03/01/2012)
Just wondering how traders decided which product they wanted. I'm less interested in Equities, more about the guys in other products. Was it more of a "i just kinda fell into it" or was there a budding interest that turned into a career because of long hours of following specific mkts etc.
Thanks for your feedback. Little background on why is that I'm interetsed in a future in trading but I'm not sure what yet. I don't think I want equities because of the pros already in it, the tiny spreads, and the product doesnt really interest me that much. I'm interested in Brazil and Canada, but still can't decide on a product or how to start following these mkts to make a more informed decision.
THANKS
FOREX: high leverage, nearly 24/7, I understand it (my degree is int. business) and TA guys like me can do well with it. Not all markets are great for TA, forex is.
I don't really have a product (applied to mostly equity shops) but I decided on options because I like the leverage and ability to control risk. Also, options are traded on almost every product so a firm understanding can translate to many products.
thing i had the most experience trading in undergrad, moves relative to macro pressures, and also what i fell into. also prop is diff from flow :>
From what you say you like, try to get into an EM desk at NY. EM traders in NY cover South America, and usually more than one product for a country or a group of countries, so you'll trade different assets related to Brazil.
You may not have much choice. Trading positions are quite rare; most people jump on their first trading opportunity, no matter the product.
dabanobo - that's the main impression i get. The problem that I come to then is how do you prepare for that interview. just know the basics of all types of mkts?
Maximus - thanks for the advice. Ideally this is what I want but as said before, jobs are scarce. Any advice on where to start doing research for these mkts with a focus on getting into trading? WSJ/FT/BBG?
Just follow the news regarding that market. Try to get your hands on some research reports from banks, you might be able to find some online. Like many people have said, the desk chooses you, but there are a number of things you can do to help being chosen, and being prepared and showing interest is crucial IMO. You'll get a chance to network with all the desks, and if you are doing an internship you can always just go up to the guys tell them you are really interested in their product and ask to sit with them for a day or two, even if you're not rotating through that desk. That will give you a chance to shine, talk to them about things you have read and ask good questions. Don't be a smartass, you don't know much, but it will show you are really interested.
Also listen to some of the above posters in two very important things: - Have an open mind. Many people from my intern class discovered they liked a desk that they hadn't thought about. - Fit is uber important. If you get to trade in the EM desk covering Brazil but you hate everyone there you'll learn nothing and want to kill yourself. Personality varies a lot by desk, but each desk is pretty uniform since they hire people they like. So it's key to find a desk that fits your personality and where you get along with the people and they are willing to teach you.
Wtf ? Traders don't pick their products the fight it out in a massive pit where the first one out has to do equities in Dallas.
That was good, lol
Why you giving away industry secrets...
To some extent, the "elders" of the desk will match the products to you.
Interview-wise, the trader mindset is not product-specific, though of course some basic knowledge of a particular market will help modestly, so long as you don't over represent yourself (a highly UNdesirable trait in a trader).
Portray yourself as young, hungry, and competent. It's important to understand risk-reward, payouts, probability distributions, etc., but just as important is passion for the markets/pricing, raw ambition, and willingness to learn.
perfect advice -- i did a lot of trading comps and did very well in undergrad but i knew i was entering a very different world which was shown by all the crazy data being thrown at me the first day on the trading floor. most of the guys who come in having read a ton of books and knowing EVERYTHING fuck their trading up and are out in the first year.
if you're in a formal internship program you'll have the opportunity to be on a bunch of different desks. generally speaking, if you have the ability to choose, you'd really like to go for where you fit best rather than what product you like best--you could be on the desk with the product you love most, but the bottom line is that if you hate everyone you work with you're going to end up hating your life. fit is IMO one of the most underrated parts of desk selection.
For most people, the desk chose them. You "choose" whichever desk gives you the offer.
I just fell into equities. Only spot that was open.
I wanted to do equities because they are fast paced can combine macro and micro elements. I did however fall into the strategy that my group covers (event driven). The funny part is a lot of the names we cover are like watching paint dry they trade so slow and with super massive queue's and lack of volatility.
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