Hey guys, I'm starting at a BB for trading in the FI division this summer. I want to be a FI prop trader some day, hopefully at a large hedge fund. My question is what desk is the best one to get on? Which will give me the best general background in FI and open me up to hedge fund opportunies as an arbitrage trader some day? I've heard some varying advice. People advise: 1.) I-rate derivatives: you learn a lot about FI and how to manage risk. 2.) The bank's arb/prop desk (if i cna get on it). Obviously if you want to be a prop trader this is the way to go, but some people say that it's better to learn the business as a flow trader and that it's VERY VERY hard to jump right into prop before you know anything. 3.) Treasuries - gives you a good foundation in fixed income and you will probably get to do some arbitrage trades. Does anyone have any insight? Keep in mind that my bank is one of the top banks on the street for derivatives and i have the math programming background, so i'm leaning towards options trading. Also, what is options trading like for prop? I'm assuming that it's hard to make prop macro trades using these instruments...what about relative value/arbitrage opportunities? Or is it more you just take a directional view on the market? thanks in advance
what is a flow trader....is that actually an operator putting in peoples orders, or a a prop trader that just front runs orders? avoid either if you can, they may both hinder any trading abilities, if they cloud ideas about risk and abilities to trade. I would suggest derivatives (i'm biased as this is my background) but derivatives (being options).....if you actually learn about trading them, (and not just theory and corporate) involves all of the things you are looking for. arbitrage, risk management and outright position trading. Most bank derivative desks are market makers, which is a good start. i know more traders who wish they knew more about derivatives than derivatives players who wish they knew more about trading. hope this helps.
that's kinda what i was thinking...rate options would teach me a lot about fixed income fundamentals while at the same time giving me the derivatives and risk management background. I hear that these guys normally have no problem getting onto a prop desk later on. Flow is the same thing as market-making. Where do you work? Do you work for a bank, and if so which one? Or do you trade on your own? I haven't heard of many day traders who speculate in derivatives.
i used to work as a market maker in equity derivatives for a broker. left there 6 years ago and have traded my own money since. the derivatives give you leverage and risk control if you know how to use them properly.