What's up folks, I'll be doing an internship in markets on product desk rotations and I have the option to pick a desk sometime afterward. Obviously, nothing is guaranteed, but I would like to be prepared if things end up going favorably. I have no preference and honestly don't know too much, just fell into this role out of pure luck + genuine interest in markets/finance.
So, what are the "best" products? Not sure if there is an objective top choice like there is with M&A in banking (for the peeps obsessed with exit ops and other stuff). I am primarily interested in building my career and am not pressed on exiting to the buy-side or anything like that at the moment, but that could be due to my lack of familiarity with the landscape; I haven't necessarily ruled it out.
My top priorities:
- Job security (is there a future on this product)
- Skillset/transferability (what can I do with skills I gain from covering this product)
- Substance (I've heard certain products can be really dry and technical, while others can be more variable and exciting to cover. Ideally, I would like to find something that is both transferrable if I need to leave and interesting but I am aware that you can't always have it all. Just trying to find a good balance.)
Bump
Heard very good things about rates, high yield/distressed, mortgages, and literally anything involving options. Those might be good places to investigate to find the right fit.
Since you were previously considering ibd and p/e, maybe think about high yield or distressed because of how you look fundamentally at credit. It will basically never be automated, and because of the illiquidity and frequent impossibility of a good hedge, you can hold names for a while if you like the credit (or because there's nobody to sell it to). It's fairly unique in how research and trading are more closely integrated, so you'll start out doing a lot of credit research (and thus learning that skillset), but its a trading role, so you learn how to take risk and what drives markets. Three potential drawbacks of high yield are that although the risk of automation is basically zero, high yield is more constrained by regulations, high yield is much more slow paced compared with something like rates, and that you learn micro instead of macro (which is neither a pro nor a con).
Awesome, this is the kind of insight I was looking for. I'll likely be on the sales side, does that change your input? Will look into HY/Distressed.
For sales, SPG gain a good skillset; same with credit.
In sales, you won't take risk and don't need to learn a product in as much depth as in trading, but you build good relationships, have a slightly cushier job, and have better breadth of coverage, if less depth. Credit is still great as you look into credit, work closely with hedge funds and institutions, and add a lot of value by giving good color to traders and helping to move a very illiquid product where it is critical to know why someone is trading. IMO if I were doing sales, I would go for something as illiquid and fundamentally driven as possible, as those are the areas where sales can actually create the most value. As previously mentioned, securitized is also good because its fundamentally driven and can be less liquid if you are talking about stuff that is significantly structured or has significant credit risk (not TBA). The fundamentals for securitized are different from high yield credit (for mortgages, a lot of it has to do with prepayments), so I would think about what type of products you would be more interested in learning about and covering, as well as the types of clients.
Do you have a view on energy/commodity derivatives?
Energy derivs is great if you are at a bank thats good at it, just has much less in common with the ib/pe skillset than high yield/distressed. A lot of commodities at banks is more structured/otc derivs based and has interesting basis risk stuff due to differences in location, grade, etc. A lot of european banks have exited the space due to regulatory constraints, but if you are a good place, you can do well and have good exit ops (both to hedge funds and prop, but also to oil, physical trading, and energy companies if you want to change careers/transition to physical/desire more stability). If you are at a bank like morgan stanley, jp morgan, goldman, or citi which is strong in commodities and committed to it, then energy derivs is great if you are interested in commodities, especially if you are into macro, geopolitics, and are strong quantitatively.
untrue (sadly). not as easily automated but most small orders are already getting filled electronically. eFICC is a growing biz and will only grow bigger
having said that credit is defo one of the more exciting parts of the biz IMO (im a credit guy so obv biased) and defo one of the areas that u cant really automate/replace humans
bump
What products are best to cover at JPM, what are they known for ?
Anything in FICC or EQD.
What’s the best desks within FICC?
is EQD equity derivatives? what specifically in EQD? Is exotics and delta one better than single stock?
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