Ask me about working with derivatives for 'retail' clients

[Scorpion Man]

Ummmm....what do you mean by saying this?

"A fixed-to-floating swap is risk-reducing 95% of the time. "

By definition, a fixed rate liability has no "risk" ... its fixed. By floating you are taking on the risk of interest rate volatility. Maybe you meant something different...

Having been on the other side as a potential buyer of these securities I don't agree that people always understand the costs involved. I think many people also think they are getting "something for nothing". THat is basically the way certain derivatives are often pitched...for us it was often the bank trying to get us to pay them for using their balance sheet when we didnt need to.

[Jeffmet3]

Of the bigger firms in NY, which would you say are better to start off working for, which offer better growth within, which will provide more options for moving horizontally as well.

What did you start off doing when you came into the company selling derivatives.

what are your thoughts on the future of the industry, ie. what direction is it moving in

thanks,

I'm thinking about getting into something along the lines of derivative trading, or some type of brokerage/wealth management as regardless of the starting 6-figure salary, I don't know if it's worth it to go into i-banking.


jeff

[KLLions]

Whether floating-to-fixed, or fixed-to-floating, 95% of the time we were simply matching the liabilities and assets, and thus lowering the client's risk.
Many clients have sold a business in return for some interest-bearing LIBOR note. They have the risk of floating rate.
Clients also borrow fixed and invest floating, and thus may have too much 'fixed' risk, the risk that the floating pmts coming in may not cover those payments. I think we mean the same thing, just using different terms.
Obv, the bank stands in the middle and takes 0.5-5bps. They don't make money on directional movements on the desk, just the b/o spread.

[KLLions]

[ QUOTE ]
Of the bigger firms in NY, which would you say are better to start off working for, which offer better growth within, which will provide more options for moving horizontally as well.


[/ QUOTE ]
Any of the major ones would be fine, really. It is a huge growth business. They all have different strengths, it would depend on the desk you landed on.
[ QUOTE ]

What did you start off doing when you came into the company selling derivatives.


[/ QUOTE ]

My first derivs experience was selling and marketing IR swaps, caps, and collars, virtually all aimed at risk-reduction, unlike the LIBOR-cubed swaps that Orange Co bought [and then pretended they didn't understand, what a joke, they got exactly the exposure they wanted, even if it was a stupid strategy.]

[TMDG]

I want to work as a quantitative trader or quantitative analyst (those math/physics phd geeks). I'm applying to quantitative masters programs right now.
Did you have any interaction with these quants? how would you describe the work they do? I imagine it's a lot more intellectually challenging than an ibanking job (although I hear they spend a lot of time debugging). Do they seem generally to enjoy their work?