Trading Desk

Congratulations! Unfortunately, I can't help you, but I'm looking forward to seeing replies.

I would be partial to the fx options desk, and depending on what type of credit i'd probably go for that next. Does the bank differentiate between high yield and high grade flow trading? high yield would likely be more interesting, but either would be a great desk. I'm somewhat biased and partial to options, so that's why I chose it first. i just think learning/understanding how to trade volatility is an awesome skillset to have an is transferable to other products (mostly other vol products obviously) but I think you would have a great balance between the big macro picture while getting a solid quantitative background through options

One of the most legit traders I have ever met and who I respect more than a lot of people said he started by trading Chilean Pesos. He said very similar things about learning about volatility and gaining transferable skills...Unfortunately, that's all the information I can offer you...

Thanks for the replies everyone, I don't really know too much about the specifics of each desk other than what I picked up at interviews. Rates I heard euro bonds and interest rate swaps, FX desk focuses on Japan/Asia and credit desk I didn't really get much. I assume I will find out more about these types of things when I go and visit in a week or so's time but just wanted to get some information as to what to expect and to know what to ask.

A friend of mine said he had spoke to a trader who suggested rates was one of the best desks to start with as it had the broadest exit opportunities, any thoughts on that?

Also, when you say a desk is more quantitative, what exactly is meant by this? I hear it a lot but what sort of quantitative are required and how/whydo some desks need them more than others? Is it just being mentally numerically sharp (that's all they seemed to test at interview!) or being able to sit down develop models or go through complicated valuation equations?

Thanks again for the help, all responses welcome!

Well, first decide whether you're more interested in Macro or Micro. If Micro (ie looking at individual companies etc), then easy choice go with Credit. If macro, both Rates and FXO are excellent obviously. Personally I chose Vol products because of the added complexity and the ability to apply it to options on any other product. That said, rates is a fantastic area to be in. I work on an FX Options desk (in London actually), and I am fortunate enough to be able to trade rates also. As far as pace, vanilla FXO trading is actually not to different than swaps trading. Both are around the same speed.

Well I study Economics and I am very interested in the Macro side in thats sense, but at the same time would be quite interested in the micro valuation side, guess it's just something I'd have to look into more.

@Revsly, it is actually a Vanilla FXO desk, would you possibly be able briefly describe the nature of some products that would be traded such a desk? Or if it's easier link to some information? I have done abit on google but my knowledge minimal and I'm just looking for a basic description of their structure to get started with.

Thanks

Not sure which bank it is, but sounds like the vanilla and exotics are not in the same book, so you'd just be trading/risk managing a book of vanilla calls and puts, generally o/n out to 5 years. Naturally, you'd also be trading spot/forwards also.

More quantitative means that the math involved is more complex. You won't develop pricing models and go through the equations, but you still need to understand what's going on. Bond and Swap math is fairly straight forward, while options are more complex. My intention is not to discourage you fro the FXO option. It's not rocket science, anyone who got into a BB program is capable of learning it. It's just a personal preference, some people don't like it as much.

If you say you are interested in the macro and micro side your best bet would be credit. It's a good combination of both.

Revsly, how is your FX desk organized? What I know of is a division between spot, forwards and options. When you say he'll be trading spot and forwards too is that just for hedging and risk balancing purposes or do you make markets in all 3 of certain currencies? Also, how is the flow in the exotic options space? Is it fast paced too or is it more like rates options with very thin liquidity?

Yes, spot/forwards/options are all separate. Within the options desk, we have a combined book of vanilla and flow-exotic options which is managed for the most part by the vanilla traders. Flow-exotic pricing is done by the exotics trader, then there are more structured-exotics as well. Flow-exotic pricing is slower-paced, and while there is a secondary market (broker market) there is no direct market like in vanillas (for vanilla vol you can call up another bank directly to have them make you a price).

Right, you wouldn't be market-making spot/forwards, but the spot/IR positions your running (or not running) is at your discretion. Might run a delta because I like a particular position, or perhaps because I have an asymmetric risk profile (gamma risk-reversal or am short/long vol and the delta position is a proxy hedge).

+1 on what revsly wrote

furthermore if it's Deutsche, Barclays or UBS you should take advantage of their strength in FX and rates

As a follow-up, what sort of things would you look for in a desk (non-productive specific) to intern on, thinking of culture-wise stuff or other things to consider?