If you're a student who's thinking of working in a markets job in an investment bank, you can be forgiven for feeling confused about your options. Firstly, do you want to work in equities or fixed income sales and trading? Secondly, how do all the different products (managed by different "desks") fit together?
Last week's global markets investor day presentation from Credit Suisse went some way to answering the latter question. While it didn't solve the equities/fixed income dilemma, the charts below provide a helpful beginner's guide to the various equities and credit products on offer, and how they're grouped into different business areas. If you're a student looking for a quick primer on all the different trading desks, they should be invaluable.
The chart below shows Credit Suisse's segmentation of business areas (and therefore jobs) in its equities business.
If you work in cash equities at Credit Suisse, you could work in: origination and capital markets (ie. equity capital markets, raising money for clients looking to issue new stock), in "high touch trading" (advising large and important clients on particular trades), in program trading (trading whole baskets of stock as so-called "block trades"), or in electronic trading (using electronic systems to execute trades automatically).
If you work in "prime", providing special financing and trading services to hedge funds, you could find yourself working in: margin financing and securities lending (providing financing to hedge funds buying securities or lending securities to hedge funds, often so that they can place short trades), constructing index products, or clearing and executing trades.
If you work in research, you could be an equity researcher who covers single stocks (ie. individual companies), someone who suggests equities investment strategies across whole markets and industries, or you could work on Credit Suisse's bespoke Holt stock database.
Similarly, you could originate or trade convertible bonds, or you could work on flow equity derivatives that are traded on exchanges, or more complex equity derivatives that are structured for particular corporate or ultra high net worth (UHNW) clients.
While the wheel above describes Credit Suisse's categorization of equities trading jobs, the wheel below shows the Swiss bank's categorization of its credit trading roles.
On the left are all jobs relating to Credit Suisse's huge securitized products division - including finding assets to finance, helping clients finance growth through securitization, trading standardized securitized products issued by U.S. government agencies like Fannie Mae and Freddie Mac, or trading private label securitized products issued by non-government clients.
On the right are all the jobs relating to all the other areas of credit trading. There's investment grade origination (helping highly solvent and established clients to issue tradable debt products) and investment grade sales and trading (selling and trading these products on secondary markets). There's also leveraged finance origination (helping less established and less solvent firms to raise capital and issue tradable debt products) and then leveraged finance sales and trading. And then there's so-called "client financing," for all other forms of debt-focused capital solutions...
Credit Suisse's charts aren't all encompassing - they don't cover the FX and commodities trading arms of other banks' fixed income businesses, but they offer a quick summary of how trading desks fit together. If you're applying for sales and trading jobs in investment banks, or attending an internship at an investment bank, you might want to familiarize yourself with the categories before you start. That way you will at least know what's on offer.
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