G10 STIR and EM FX Trading [Spot and NDFs] Prospects

Hi everyone,

I wanted to make this post to get a better understanding of the prospects of working as a trader in either G10 STIR or EM FX [FX Spot and NDFs].

1) Are these products prone to get automated and become purely electronic with the eradication of voice trading anytime in the very near future?
2) Comparing the relative prospects of G10 STIR and EM FX
3) I also wanted to hear from electronic traders on how a voice trader can eventually transition to an electronic trading desk. From G10 STIR Voice to electronic G10 STIR for e.g.
4) Lastly, is it reasonable to expect exit opportunities to rates [ > 1-year rate products desk], hedge funds, or asset managers are given a background in G10 STIR or EM FX?

Thank you and I hope everyone stays safe!

Comments (10)

Most Helpful
  • Associate 3 in S&T - FI
Jun 13, 2020 - 10:48am

1) All products are heading toward automation/more automation (only exception being distressed credit, or super complex derivatives products). I used to work in options trading (supposedly one of the more complex products) and by the time i left we had an electronic platform for clients to deal vanilla options+exotic options (think barrier options, TARNs etc). Now, i'm not saying you're going to come into work one day and find you've been replaced by a robot, but will likely transform in a way such that the electronic platform will quote all small/liquid products/tickets, whilst the trader will handle the big client tickets etc.

2) Impossible to say, varies from year to year, bank to bank and trader to trader. Its always hard to say whether one desk is "better" or "worse" than another. Desks rise and fall with PnL and i've seen desks which were killing it one year to straight back to flat next year and visa versa.

3) See end of 1)

4) Sure. But these jobs are hard to get and you have to prove that you are a good trader on the sell side (i.e. can generate decent pnl) before making it over

  • Trader in S&T - FI
Jun 13, 2020 - 8:57pm

Thanks for the response sir.

I am working on one of the above desks now and I've been seeing flows slowly ebb away to e-desks. At the moment I am still fairly junior and I was just trying to seek advice on how to position myself for the future. As you've rightly mentioned, desks do rise and fall with P&L and my fear is once my desk's P&L is not attractive for the bank, there may be a sharp reduction in headcount. Trading itself won't go extinct as you'd still need sellside liquidity providers. As e-desks have a lower personnel costs management would naturally favour them with time as the software gets more developed.

  • Associate 3 in S&T - FI
Jun 14, 2020 - 1:30am

Reduction of headcount is going to continue for quite some time IMO (regardless of S&T revenues at banks) and anything that can be automated will be automated.

If anything, Covid 19 has proven to banks that even with the gradual reduction in headcount the past few years or so, banks can still generate decent revenue through the crisis.

  • Trader in S&T - FI
Jun 13, 2020 - 8:58pm

I was hoping to hear from traders on e-trading desks:
1) the skills required to transition into an e-trading desk
2) the programming languages typically used on e-desks
3) the differences in responsibilities between the e-trader and the staff helping to bring the code into production
4) it would also be helpful if you could explain the main value add that an e-trader can bring to the bank

Thank you!

Jun 13, 2020 - 11:10pm
  1. depends on the desk. Some desks put quants directly on there with traders tweaking parameters. Some desks have traders helping to code up trading strategies.

  2. again depends. Anything from c++/java/python/R/VBA, very likely those guys will be using Q/kdb+

  3. see (1)

  4. basically trying to make the bank more efficient

  • 2
  • Trader in S&T - FI
Jun 13, 2020 - 9:14pm

Yeah eventually most products would transition to e-trading. For rates I'd think the linear stuff would be easier to port over. Exotics like swaptions not so much.

Jun 13, 2020 - 11:14pm

you profile looks like you're a banker who ended up in an S&T division

  • Prospect in RE - Other
Jul 2, 2021 - 4:59pm

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