What exactly does a trading desk do?
The primary role of the desk is to make risk prices to clients in equities and to manage, or "unwind" that risk as best as possible.
What is a "risk price" and how do you manage risk?
There are two main ways in which we might execute a trade for client. They might give us an order for a certain volume of stock, which is readily available on the markets. We can then execute that trade (buy or sell the stock) on their behalf. In this scenario, we are effectively trading as an agent on behalf of the client.
Sometimes, however, the client's order might be more complex and therefore less readily available on the markets. In this situation, we would quote them a price for that order, known as the "risk price". Effectively, it's the price at which we are prepared to buy or sell to the customer. If, for example, we sold them stock, we would then try to buy it from the market at a lower price. We therefore take on the risk that we won't be able to do that.
My responsibility as co-head is to make sure overall risk levels are under control, that the bank's capital is allocated as efficiently as possible, and that we are compliant with internal and external regulations at all times.
How is your department structured?
I'm co-head of developed cash trading in Europe. My co-head and I run a team of 20 traders and together we cover all the Western European markets. We divide responsibility within the team for all the different sectors. For example, I am responsible, alongside two other team-members, for the natural resources, chemicals, oils and pharmaceutical sectors. The other traders on the team might focus on anything from the financial sectors through to retail or technology.
What makes being a trader challenging or rewarding?
Trading is exciting because you have to respond to the international economic environment, which is constantly changing. You live and breathe the economy. Breaking news affects what you do. You might go to work thinking that the day's going to pan out in a certain way and all of a sudden something changes. You have to react quickly to changing events, making sure that you are in the best possible position to get information to your clients. It's the fluidity of the job which makes it so interesting and exciting.
Looking ahead, what will be the big trends in the markets this year? What are the key issues?
The key areas to watch will be the metals and mining sectors, which were phenomenal performers last year from the lows of 2008, as were the banking and retail sectors. The question on everyone's minds is whether this can continue, or whether clients will switch to more defensive sectors. If the economy strengthens, then we can expect a further boost to metals and mining stocks, which are normally cyclical sectors. Then there are the even bigger questions. Will assets continue to be reallocated into equities away from other asset classes? Will there be a government funding crisis in 2010? These are the major issues that will dominate this year.
What does it take to be a good trader?
Enthusiasm for the job is the most important thing. We are a very tight-knit team. We work long hours and come in early in the morning, and it's very important that we all muck in. By passing through the recruitment process new team members have already demonstrated numerical and decision-making skills. It is enthusiasm and the ability to work as part of the team that we look for.
What are the advantages of doing an internship?
An interview is a very short amount of time for a candidate to demonstrate their skills. But over the course of an internship, we can really tell if they're a good fit. Equally, it enables them to assess us and see first-hand what the day-to-day job involves, so it becomes a two-way process.
Why is it a good time to join Credit Suisse?
Credit Suisse was prepared for the credit crisis and has suffered less than many financial institutions. We are one of the few banks that have emerged stronger as a result of the financial crisis. We have grown our client base and are in a very good position to take advantage of the new economic landscape.