Hey guys, this is my first time here. I'm applying for a Fixed Income Trading Assistant job. I've read and understood the job description, but I'm still not too familiar with what a trader does. I'm very interested in the stock market and I have invested my own money but taking a buy and hold approach. Anyways, traders make money buying low and selling high. But what is particular to fixed income trading over options or stocks or coffee. Anyone there who has experience in the fixed income trading floor can explain me what they did and what it's assistant did? Also, I saw on trader magazine that traders can make huge sums of cash which is probably why you all do it. Can you tell me anything about the figures and possibilities? Thanks for your help Nick.
there are may posts about the numbers for traders. Somewhere between 80% to 95% of day-traders fail is the number I hear. Huge sums of profit come at huge risk.
I dont have any fixed income trading experience, but I do know a little bit about modeling fixed income. In fixed income, there are lots of models with fancy sounding names like "Cox-Ingersoll-Ross", the "Vasicek model", "Ho Lee Model", "Hull White mode", etc. These models are essentially to bonds what "Black Scholes" is to options. They spit out theoretical prices as to what bonds SHOULD be trading at in the marketplace. Anyways, there are a few ways to use these beasts, but one approach is to model a yield curve for the particular fixed income market sector you are trading. I suspect as a fixed income trading assistant, you would be looking at what is trading in the market versus what the model says it should be trading at. Then you would use your own analysis skills to determine whether what you observe is an actual trading opportunity, or just a data fluke. This obviously just scratches the tip of fixed income. Its a fairly deep subject, and only time and experience will allow to to grasp everything thats going on in it. I suggest shopping around on amazon for books. Some that may interest you include: Fixed-Income Securities : Valuation, Risk Management and Portfolio Strategies (The Wiley Finance Series) (Paperback) Options, Futures, and Other Derivatives (5th Edition) (Hardcover) The Handbook of Fixed Income Securities (Hardcover) Interest Rate, Term Structure, and Valuation Modeling (Hardcover) FYI, some of these titles get a little heinous with the math. Best of luck, -Tony
Lady, One day before an interview is a not enough time to learn bond basics. So, you need to prove them that you are smart enough to learn means you will get tons of math, stat and analytical thinking questions. Make sure to know the relationship between price and yields, ytm, convexity and duration. That's about it for now. Simple time and value concepts should be good too. For example, if I offer you a bond paying $100/year for the rest of your life, how much would you pay for it?
Thanks for the info, specially the post on the name of fixed income trading models. As for my homework I have been doing it for a while including research on fixed income which I do know all the basics. I have taken the CFA level 1 already and although I didn't pass I passed the fixed income area and others. Just when it comes to being a floor trader and assistant I don't know much of what are the practicalities of the job. Nick.
1. Knowing what the trader's position is at all times. 2. Writing and booking trades. 3. Getting the desk lunch and coffee with a smile. If you make friends on the desk and are good at the above three, you have a chance of advancing to Junior Trader in 2 - 3 years without an MBA.
Why do you assume he/she is a lady? anyways I would suppose they go for a woman too, but hey maybe they are BoA in SF and they prefer a sausage and milky souce instead of big tits and low cut blouses.