OTC derivatives traders should reinvent themselves

Traders who deal with over-the-counter (OTC) derivatives have been urged to reinvent themselves to combat changes in the industry.

This advice comes from analysts at Bernstein Research, who predicted that trading profits look set to fall and the margins achieved by OTC experts will drop significantly, reported efinancialcareers.com.

For people in this position, it may be time look at different jobs in London as the position of the highly paid OTC derivatives trader may be set to disappear, according to the analysts – they suggested looking sales or client support roles.

Describing the state of the investment banking sector, they said: “New technologies are being pursued to shift fixed income market making from the current risk-seeking, balance sheet intensive flow model toward ‘capital lite’ client netting platforms supported by more limited pools of inventory.”

This was one of a number of remarks by Bernstein Research representatives about employment in the finance world – they also encouraged people to work for a market leader if they can, as this will help them keep their job.

Darren Williams, senior European economist at AllianceBernstein, wrote on the company blog at alliancebernstein.com that another pivotal challenge for finance workers in Europe is the state of the Greek economy.

In his opinion, until somebody works out how to drive down unsustainable debt levels in the country there will be a chance of a disorderly exit – and all that this entails in terms of contagion.

by Paul Smithson on November 19, 2012

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