Structuring within S&T, Pay, and Exit Ops.

Looked through the forums and couldn't find a lot of info on Structuring. What do these guys exactly do and does anyone have a "day in the life" of a structurer.

Am I able to switch to trading and how are exit opps (want to go to buy side/hedge fund later)? This is for SA, for full time I would hope to work in trading, is this possible?

Working with structured finance products

One of our certified users describes the transition from structured finance to trading. He also discusses how valuable a structurer is to a trading desk. This is reiterated by other certified users. As structurers are usually rarer.

The transition from structuring to trading is the most natural of any roles...period.
Whereas the sales guys only need to know high level details to pitch structured products to clients, the structurer has to be THE MOST familiar with the product, all the risk measures and nuances that come with the product. Since trading is essentially the responsibility to hedge the desks exposure to these products (i.e. understand the risks and nuances), you can see why this is an easy transition.

So exit opps from Structuring:

  1. Structuring
  2. Trading (sell-side)
  3. Sales
  4. Trading (buy-side)

note: this applies to structuring roles where you actually get to price and develop "interesting" products, not those "structuring-in-name-only" roles where you can recommend buying an ATM vanilla call and selling an OTM vanilla call and refer to that call spread as a complex structure (lol).

The pay of Flow traders, sales and structuring are all in the same range. (Prop traders obviously surpass this average).
The thing with structurers, is if you only have 1 or 2, and they're invaluable to the desk, you'll pay them top dollar to keep them around. But if a hedge fund comes along an offers them top-TOP dollar to work for them...chances are you'll lose that key structurer. As was said before, for every 1 structurer, there are probably 2 traders and 3-4 salespersons.

Day in the life? Ask Revsly. He did Structuring as an SA and will be doing Trading as an FT (exactly what you were looking for)

Here FX Trader goese into more detail about the exotic finicial instruments that his desk worked on.

My desk was pretty hardcore exotics and our client-base were interested in pretty complex stuff. Things such as:

  1. Correlation swaps, american variance swaps/vol swaps, cross currency swaps
  2. asian options, faders, quantos, powers, lookbacks, compounds (lol i love these! options on options!)
  3. Capped/Floor variance swaps on baskets (for vega dispersion), Best-of; worst-of
  4. accumulative forwards, installment options, auto-renewal forwards, amortizing forwards.... and much more
  5. proprietary custom index products (this stuff takes a little longer, but when we do release it, the flow is heavy!)

The group who deals with the standard vanilla stuff you mentioned (range notes, etc.) we typically refer to as "Sales-Structuring". (i.e. they dont really need to have an in-depth understanding of how we price and develop these, they kind of just put together low risk run-of-the-mill stuff for risk-averse clients).

What is a Structured Product?


Recommended Reading

 

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