Could someone enlighten the world of equity derivatives for me..
I recently had the pleasure of networking with a BB trader and one of the things he told me is that he thinks one of the best seats to get on a trading floor is a position as an equity derivatives trader, especially if you're interested in transitioning to a macro fund.
Any idea why/if this is true?
I have a rough idea what the job entails; trading of non-linear equity products and ETF's. I have also read that this desk is normally filled with extremely bright and quick witted individuals and that there is quite high turnover. But that is essentially the extent of my knowledge.
So I was hoping someone would elaborate on the job as a whole.
Specifically, why it is a good place to get a macro skill set, compared to FX or Rates?
Is there any opportunity to take risk?
Is it becoming more automated? (I know allot of HFT firms that specialise in being a MM in ETF's, are they the major players in the market?)
Do people normally move to buy sides from this seat? If so, is macro most common and is it usually a PM role or just execution trader?
And do you think it's the best seat on the floor? (I know, controversial!)
(PM me if necessary)
And in advance, thanks for any input into this discussion.
Incoming equity derivs guy here - personally I would like to know the answers to some of these questions as well. Of what I do know though based on my limited time with the desk thus far, if you have a good understanding of volatility as a proxy for market conditions and how to deal with non-linear products in general, you probably have the type of skill-set that is transferable to a position that deals with many ways of expressing risk - something certainly inherent in macro-oriented trading, which can be rather open-ended. I also believe the non-linear nature of derivatives allows for more risk-taking, simply by virtue of there being more risk to manage- risks which you may choose to either hedge or keep.
I think it's intrinsically a very interesting role and although it's impossible to say whether it's the best seat it is the one I was the most keen on joining after spending a summer at a BB.
I'd say the best role for a macro role at a fund down the road would be a fixed income S&T role. When you're in fixed income, you're forced to look at geopolitical issues around the world, central bank announcements, economic data releases that drive equities and fixed income, oil, inflation, GDP, CPI, etc.
Equity Derivatives - Anyone worked in this field? (Originally Posted: 05/07/2007)
Anyone worked in this field?
Interning for a smaller MM over the summer, and just want to get the best experience out of it possible.
What kind of work do first year analysts get? How quant heavy is it? (i.e. I've worked with B-S excel models in class, but could come close to deriving the damn thing)
it's not that quant heavy.
outlook for equity derivatives (Originally Posted: 06/30/2012)
Hi all,
I heard from some people that equity derivatives are getting downsized and might not be the best place to start in s&t. I have no idea if that's true or not- what do you guys think? What's the outlook like?
quit already.
anyone have any input?
Still going strong. The industry is always changing. If you want to do trading, take some programming - you'll never use it (no one really does outside of the middle and back office), but it will help you communicate with your support better, which is crucial.
alright thanks!
Equity Derivatives - Any insights? (Originally Posted: 04/03/2007)
Anyone have insights re: this, is the market growing, exit ops, which banks are the most highly regarded in this, etc
Specifically regarding structured equity products and Asia if you know
growing b/c all the other equity stuff is being standardized and exchange-traded. equity derivs. can still be customized into having unique payoffs, etc. as long as it can be hedged, then banks will trade it.
excellent,
Does anyone know anything about the market in Asia, as I believe much less of the vanilla options are exchange traded and much of it is still OTC
The market is growing, I've mentioned elsewhere that equity derivs are dominated by french banks - Soc Gen especially - with Citi also being pretty good. The treand is for more and more complex exotic products - with accompanying high fees - so lots of money in it.
Equity derivatives - Big banks (Originally Posted: 05/08/2007)
I wanted to know about equity derivatives trading at some of the big banks like Goldman, Morgan, Merrill, Lehman and JPM?
Anyone work in trading or support? Thanks
What exactly do you want to know?
I wanted to know more about the compensation for Equity Derivatives support functions at the big banks. Thanks
It's nothing amazing from what I understand. Somewhere in the area of 3 - 10k (Sterling) on a good year. The only advantage about being trade / sales support is the opportunity to step into their boots when they get fired.
How are equity derivatives doing these days (Originally Posted: 09/17/2006)
If i ever get sick of the IBD bullshit i may tap into a lil trading. how is options trading. i used to trade em all through college and make some decent cash. how are the spreads? as good as cdo's?
Also wanted to know about equity derivatives trading at some of the big banks like Goldman, Morgan, Merrill, Lehman and JPM?
Anyone work in trading or support? Thanks
Equity Derivatives - How does pay compare? (Originally Posted: 10/14/2006)
Everybody on this board keeps on saying FI is where to be and to stay away from Equities. Does this apply to Equity Derivatives? Is Equity Derivatives a good place to be? How does the pay compare to FI?
pay??
You get what you earn, be it trading exotic options or pork bellies on the CME.
Why are people so mislead when it comes to S&T?!
This will be the 3rd straight record year for our ED trading desk. IMO, it's a good place to be.
That's great to hear. Congratulations.
What products are you guys trading? Is this the single-stock listed options or are you talking more exotic structures?
ED can be a great place to be. I've always been in fixed income, but can't think of a bad thing to say about equity derivs. If you have the opportunity to get on a desk, go for it.
why there are a lot of ppl saying that FI is a better place to be than Equity???
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