Choosing between 3 desks for BB S&T SA

I am currently in the process of being placed to a S&T desk at JPM for the summer. I am torn between FX (spot+options), Commodities (crude derivatives), and EM (LatAm). The people in each are great and I know it would be hard to go wrong with any desk. How would others think about this and make the decision?

Thanks in advance.

 

I thought the commodities business was dead/dying at banks but maybe I'm wrong. The FX people are great but I'm not sure I would want to get into spot FX just because it's not necessarily sustainable. I know nothing about LatAm but I thought they wanted people who were fluent in Spanish (maybe I'm wrong?).

Are you wanting to trade, structure or sell? Also keep in mind that you probably only know a few people in each group and they don't necessarily reflect the entire group. You will have opportunities to see other groups but the group you're placed in will 80% of the time be the group you get hired in.

 

Thanks for the reply. The physical commodities business is all but dead at the big banks and most banks have sold off their physical businesses, but the financial products are still going strong.

I want to trade, and I'm at a point after meeting the desks that I can choose between the two trading desks and be placed there. What you highlighted about spot FX is part of my hesitation with FX. They can only commit to me being placed in the general FX group and not about whether or not it will be spot or options. And for EM, they don't mind if you don't speak Spanish from what I understand after speaking with them.

How does JPM rank across the street for each of these desks? I'm also trying to get a sense of which desk is the most promising/can open the most doors down the line, knowing that I want to do something global in an investment role.

 

Well the good news about JPM is you can't really go wrong. Here is the league table for first half of 2014 (the full year is not available for free right now but the results are the same pretty much every year). http://www.coalition.com/ext/assets/investment/CoalitionLeagueTables1H1…

As you can see JPM is top 3 for basically everything (an exception is credit but that doesn't even seem right since that's historically one of JPM's best desks). I can't really help you with what will be the best down the line but if you're looking to trade global macro I've heard FX and rates set you up the best for a role like that. If you want to trade commodities later in life then obviously do commodities. I know nothing about LatAm EM. If you want to trade credit risk then do credit and if you want to trade any sort of securitized product (at any type of fund) then do SPG, pretty simple.

 

I have been told JP have one of the best LatAm EM credit franchises and the NY desk is an amazing place to be, I would pick EM Credit > FX unless you can be sure of getting onto FX options. Send me a pm as I was in a similar situation in the UK a few months back.

 

How the heck do you expect him to know what he wants to trade "later in life"? Geez. Also trading different products is not really that different...you could be trading Magic the Gathering cards and it wouldn't be much different.

I think the OP has great options and is probably quantitatively adept if he is getting placed on derivatives desks. Your intuition is correct in that you would probably be bored with spot FX. Unless you have great rapport with the FX options side and they tell you specifically they have a spot opening up for FT in their group the summer you graduate, it's a coin flip.

You know what is going on with oil right now; that desk could be very interesting at least through the end of 2016. Also you will be in derivatives, so that sounds like a good fit (assuming again that you are pretty quanty if you received this array of desks).

Hard to say on EM as it is so broad, you could be trading cash bonds, local rates, CDS (also maybe FX - not sure if JPM runs their EM FX out of the EM group or the FX group - you might want to check on that). Do you have any more specificity in terms of what product in EM? Some are quantitatively challenging and some are not.

Forget about what is the hot desk right now, just find something that YOU think is interesting and where the people will teach you stuff.

Also, take some of the comments above with a huge grain of salt. The amount of bold-faced misinformation spread around sometimes...smh

 

Thanks everybody for the replies and thoughts. I have made a decision to go with the commodities desk. There was no way at this point of the FX desk guaranteeing the options desk, while the commodities desk is an options desk, so I figured I would take the certain one. I am pretty quantitative and want to gain the options skill set, so this seemed like a better choice than FX or EM.

In addition, I spoke with many people that told me because of the current situation and volatility in the oil market, I would probably learn and see more on that desk.

Lastly, because of aspects of my background, I may have more of a talent advantage in commodities down the road than on another desk.

I really appreciate all the feedback!

 

Thanks! Out of curiosity, what is the typical process like of moving from financial commodities trading to physical? I know a fair amount about the physical trading firms, but don't know much about how people move from BB trading roles to these firms.

 

Well, I'd start by telling you that it isn't a traditional path made by many and therefore isn't typically expected by people in HR/recruiting. Therefore the approach is a personal one versus simply submitting your profile online. Networking with manager roles at energy houses will be the key in. You'll find that a lot of individuals move from physical to financial but the other way does occur.

One route is to target moving from BB financial to an energy trading house in financial (risk management usually, hedging physical) and then attempting to transition to physical within (probably better opportunity) while the other is to attempt to go straight into a physical role. The issue is a lot of physical shops like to bring up their traders internally so you may find yourself in some sort of middle front office role like scheduling. For now, focus on working hard where you're at, later you can begin talking with recruiters about your story and see if it can be sold.

 

I would also second telling us which bank.

Rates would be the other most macro product

If you want something with more analysis, you should look at something with a longer time horizon distressed debt, special situations, an event driven desk, ect. Another option would be to intern in a group that has a banking component (PubFin, Securitized Products, Credit).

For this internship you should get on two desks that you are interested in and enjoy them. What desk you sit on will not have a major impact on your IB recruiting. Having an S&T internship and getting offer, looks a lot more impressive than sitting on any particular desk.

"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."
 

Thanks for the advice so far. I'll be interning at BarCap, also this will be in HK which I realize might affect what you would recommend. So do you still think if I wanted exposure to one good pre-IBD product and one good macro product, I should ask for one of (PubFin, Securitized Products, or Credit), as well as Rates or FX? I really would be sincerely interested in both types of desks, but do you think that combination makes strategic sense too given my situation?

 

coming from a fixed income S&T background I would highly suggest going the route of one desk such as credit (credit research for example will give you loads of experience looking at company financials and modeling future behavior but anything in credit will help on the more micro focus) and the other desk a more macro focus such as rates or FX. If you were in the US I would say def try to go the rates route because its by far the most important of the rates areas and has the most derivative products for that reason, however since you are in HK I would suggest FX because FX will be roughly the same the different offices (g10 coverage will be the same in NY or HK, only the EM desks might be location specific), whereas rates is areas specific, so US rates is NYC, europe rates in London, etc

You seem to have the right ideas in terms of getting as much exposure as possible to different areas (this might be your only chance bc if you are hired back next year you will be at one desk and might stay there for a long time). Also want to second focusing on getting an offer, that is your goal, exposure to different products/products similar to IBD work should come second.

 

From the outside looking in I would say a credit or research based desk for sure, and for your other choice I would say something you are passionate about and interested in. That way you can get a glimpse at what IBD is going to be like and then get some insight to see if trading is actually a good fit for you in the long run if you dont like the IB like stuff.

Follow the shit your fellow monkeys say @shitWSOsays Life is hard, it's even harder when you're stupid - John Wayne
 

Really appreciate the advice guys, thanks. If it's a two-desk rotation, I'll ask to do a credit/research or securitized products desk, as well as a rates or FX desk.

"If you were in the US I would say def try to go the rates route because its by far the most important of the rates areas and has the most derivative products for that reason, however since you are in HK I would suggest FX because FX will be roughly the same the different offices (g10 coverage will be the same in NY or HK, only the EM desks might be location specific), whereas rates is areas specific, so US rates is NYC, europe rates in London, etc"

Could you explain a little more why rates wouldn't be ideal in HK, it's just that there's fewer products/it's less profitable?

One last question if anyone can help- I've searched for all the threads on trading at BarCap HK, and I've seen mixed opinions on FX there. I know that BarCap's FX in Asia is biggest in Singapore, but others have said that it's growing fast in HK too. Would that still be a good choice possibly in terms of desk strength?

Thanks so much!

 

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