![]() Q: That sounds more fun than coffee meetings… In London, Canary Wharf and the area between the Liverpool St. ![]() The after-work drinking culture is so prevalent in London that you might even be able to network with traders simply by going bar-hopping at the right times. Traders won’t have time to meet during market hours and generally won’t be inclined for sit-down meetings – so your best bet is to aim for drinks right after work, especially on Thursday nights. becomes a weaker connection than it is in the U.S., so just going to the same university as a senior trader usually doesn’t cut it. and other regions, alumni networks at top schools are very helpful, but they work much better for recent graduates (i.e., those within 2-3 years of graduation).Īfter a few years, school affiliation in the U.K. Networking definitely “works,” but there are some cultural differences.Ī: Just as in the U.S. It’s critical to apply early in London, especially if you’re from a non-target school. Traders look for technically-minded people who are comfortable with numbers and quick decisions under stress, which is why there are so many athletes on the trading floor. Typically, you’ll have a first-round interview with junior traders in-person or on the phone, followed by an assessment center if you’re in the EMEA region (or a Superday if you’re in North America). What should you expect in the recruiting process?Ī: You don’t specify a desk upfront, so you’ll just apply to the sales & trading divisions of banks, usually starting in August sometimes you will pick equities vs. Rates Trading Desk Recruiting and Interviews When there are central bank policy announcements, geopolitical developments, or economic data releases, activity on the desk flares up. Rates products offer significantly more liquidity than other types of bonds, so flow trading desks here tend to be loud and busy. In credit trading, you focus on securities like corporate bonds and credit default swaps (CDS), and company-specific knowledge (“the micro”) is critical.īut almost anything could affect interest rates, so you focus on “the macro” on the rates trading desk: economic growth, trade policy, inflation, exchange rates, and monetary policy. Rates trading is very macro-focused compared with equity trading and areas of FICC such as credit trading or distressed debt. We commit to buy and sell anything from clients, even if we don’t want the position, and then we address the risk and try to turn it into a profitable trade. “Making a market” means providing liquidity to clients who want to buy and sell. Other derivatives include caps and floors, STIRT futures, Eurostrips, swaptions, and interest rate call options. If you’re receiving payments based on a floating rate, you hope that LIBOR increases so you receive more if you’re paying based on a floating rate, you hope that LIBOR decreases so you pay less. The simplest type is the “vanilla” interest rate swap, where one party receives payments based on a floating interest rate and pays the counterparty based on a fixed interest rate. Interest rate derivatives are financial instruments whose values increase or decrease based on movements in interest rates. Gilts are the most common, though there are teams for the others as well. In London, EUR-denominated bonds and U.K. Treasuries, EUR-denominated bonds issued by European countries, and Australian Government Bonds (AGBs). Sovereign bonds are ones issued by governments, such as U.K. ![]() ![]() Of those, we focus on making markets in sovereign bonds and interest rate derivatives. “Cash” here means sovereign bonds, while “derivatives” means interest rate swaps and futures, and “exotics” means structured products based on rates, options on swaps, and others. exotics, and the same split applies to the rates trading desk. Q: Before we get started, can you explain what the “rates trading desk” does and how it’s different from other areas in FICC Trading, such as credit trading?Ī: Most assets that a bank trades are split into cash vs. We’ve published articles on equities and fixed income, but I’ve always wanted to go into detail on individual desks within those areas.Īnd just as I had this thought, a reader who works on the rates trading desk at a large bank in London volunteered to share his experiences: What is the Rates Trading Desk? It’s tough to give universal answers to these questions, so we like to present different groups and let you decide. If it is, what’s the best desk for you, and how should you recruit for it? Is sales & trading still a good industry?
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