Senior level pay in S&T

Anonymous Monkey's picture
Anonymous Monkey

Curious what senior VPs and MDs make in trading in a given year. Joining a flow equity derivatives desk at a BB, and I understand that pay can largely be dependent on book performance in a year.

However, in $ terms, what can pay look like for desk traders managing their own book or a group in a given below average, average, and above average year? Are MD's actually pulling in 1MM+? And if so, what kind of range of bonus is considered reasonable for a successful trader? If anyone has first-hand experience, I'd love some color on what all-in comp might actually look like and how volatile it can be depending on team performance.

Thanks!

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Comments (12)

Jan 10, 2019

my old boss (head of Rates Trading) made ~ 1mm base + bonus. I hear he got paid 3mm last year.

just google it...you're welcome

Jan 10, 2019

at a BB? and I'm assuming that is tail end of his career?

Jan 11, 2019

Tail end definitely, and we're talking TOP trader with fuckin piles of gold for capital. Like to make that much, you're a household name on the street. I'm on a credit desk and head trader on my desk does $750k-1MM on a good year. But what sucks is on the sell-side you get paid out a lot of your bonus in stock which blows.

Jan 11, 2019

What...how do you run a desk and not make at least a buck?

Jan 11, 2019

Idk if FI is just underpaid or what but I haven't encountered the insane comp people on here talk about. Past two years have been challenging though so comp figures have been down for a lot due to the current rate environment.

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Jan 11, 2019

Credit comp figures I've heard are somewhat better, but again from more of a flow shop... perhaps that will change as the cycle turns and automation tightens spreads. Spreads are a significant amount of credit trading PnL, as opposed to cash rates or whatever.

Jan 10, 2019

I'm sure it's a big range; probably emolument.com has plenty of data for equities traders. You can definitely get zero bonus and fired, and probably the MD head of desk at a top 3-5 shop like MS makes a buck or three.

Flow equity derivs is a pretty terrible business for a bank, though. Every year all of the interns and analysts flock to it because they think knowing Black-Scholes and a small quantity of calculus makes them smart. Turns out it's all done by computers on razor thin margins and only the very top couple of shops make any money at it. The real money in this product is at HFT/stat arb shops. Non-flow can do well, too, but it's basically ECM banking.

Jan 11, 2019

the non-flow eq derivs business is pretty interesting...For example,

What if i asked you to sell me a 10yr OTM MSFT put? How would you figure out a vol for it? MSFT listed options are only liquid out to ~2-3 years.. where you gonna get fwd vol from? How frequently would you update your delta hedge? Would you hedge rho? How much spread do you wanna charge? Can you hedge skew, and if so, is it worthwhile? Can you create an arb vs. the credit/cds/convertibles?

True flow derivs is a tough way to make $...single-name especially

Jan 11, 2019

Flow equity derivs is a pretty terrible business for a bank, though.

It's a solid 9 figure business for nearly all the major bulge brackets but ok.

Jan 12, 2019
tradingonwheels:
me:

Flow equity derivs is a pretty terrible business for a bank, though.

It's a solid 9 figure business for nearly all the major bulge brackets but ok.

Razor-thin margins and high cost of revenue (technology) makes for very meager returns on equity/RWA. The top 3-5 shops can make it work because of scale, because they already have the giant sales force, cheap funding, adjacent product teams and top-tier technology/analytics, and with the recent pick-up in vol, I'm sure they had a better 2018 than, say, 2015. But who do you think makes more money in equity derivatives, BAML or SIG?

Jan 12, 2019

I wouldn't be surprised if MS and GS make more or at least comparable money to SIG. Sure, SIG makes a lot, but still the other banks are able to print a lot and with a very reasonable return on capital. Equity derivatives businesses are NOT capital heavy.

Jan 12, 2019

just google it...you're welcome