Problems with S&T
Anytime I talk with someone who is not in the i-banking industry about my interest in sales & trading, many of them come up with the argument that traders will become obsolete in a few years.
I understand that they are usually referring to pit traders, which is obviously very different than institutional trading.
Can someone explain to me why they think institutional traders and salespeople will be around for a while. Do you think margins will ever get so small that it'll be hard to squeeze anything out of them?
technology has not been able to keep up with product innovation
lots of products trade with very, very small margins. some products trade regularly at mid.
but people still like the relationship aspect, and the hedging for vanilla products isn't always easily handled by machine. and much more so for the more illiquid stuff.
Jimbo, what types of products do you think will have the best growth potential/ the best to get into within the next two years?
go where you like the people. that's the most important thing.
in general i am biased towards rate, fx, commodities over credit stuff.
but credit derivs have been big for a while, commodities are definitely "hot"...and anything exotic is usually good.
good luck.
Why would you say commodities are hot? Exotic stuff usually involves a lot of structuring?
b/c they are. i dont get the question....there's just a lot going on in commodities land.
and yes exotic has a structuring component.
where do you work currently?
Interning for a law firm. Finance major, yet felt I'd like to see if law school is in my future. Rising junior. Very interested in the S&T side, have a few interviews set up with BBs in the next few weeks for next summer... figure I'd hop on stuff early.
cool, let me know how the interviews go.
where do you go to school?
Big 10 school. Solid GPA, quick with numbers and well-rounded when it comes to the resume. I've got some good connections... so even though I don't come from a target, I'd like to think with that combination I have a chance.
electronic algorithms/dark pool liquidity channels are creating much more opportunity for best price execution. Reality is that this was bound to happen eventually. Vanilla shares trading is probably going to take the biggest hit, however most investment banks trade much much more whether it be equity or credit/rates based or a combination of both, trading/selling products across the credit structure. Believe me, there are alot of products that cannot be structured/traded by a machine and clients whether they be institution or hedge funds, trade across numerous products in which they would not feel comfortable engaging in without expertise from the desk
Excuse my ignorance, but are these jobs that are being discussed, lost to outsourcing, or rather, simply advances in technology? Thanks
Advances in technology. However, the outsourcing argument has been brought up before too... any thoughts on this?
I would venture to guess that in 5 years banks will no longer be hiring for vanilla flow. If you take a look at the various dark liquidity pools you will see that they are all bank-contrived. The banks are the organisations forming these dark pools. It is not like a 3rd party is coming in and revolutionising the way banks trade vanilla flow. Derivatives and bespoke products are growing and will continue to grow.
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