Carrer Finance

7/31/2019 Carrer Finance

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CARRER FINANCE

DERIVATIVES

All of our financial derivatives jobs are contained within this sector. This includes traineederivatives positions, derivative sales positions, derivatives analyst jobs, derivativesstructuring positions, credit derivatives jobs, equity derivatives jobs, derivatives tradingpositions, programming positions and other derivatives jobs in New York and internationally.

Financial derivatives are basically contracts between two different parties. The contracts saythat the value of the derivative will be determined by changes to other variables. Thesevariables can be a number of things, including financial products such as equities and bondsand physical products like commodities, as well as other things which are difficult to predict -like the weather or the lifespan of a population.

Derivatives are often used as insurance and protect against risk. As an example of this, CreditDefault Swaps (CDS) specify that if a loan defaults, the holder of the CDS will still getcompensated.

Futures contracts were the earliest form of derivatives. Futures contracts were created so thatpeople who purchased certain goods could have an element of control over the price in thefuture. As an example, farmers selling wheat could enter into a contract with the people whopurchased the wheat to agree that in three months, they would be able to sell wheat at anestablished price. By doing so, they protect themselves against any risk of a drop in the wheatprice during those three months.

Other forms of derivatives that you may need to deal with in a derivatives career includeswaps and options.

Swaps are a simple exchange of one type of product for another. One of the most common iscurrency swaps, where loans and/or the interest payments on loans are swapped from onecurrency into a different one.

Options are contracts which let one party buy or sell assets to another at a set cost at a definedpoint in the future. Unlike futures contracts, there are no obligations to invoke an optionscontract. Using the same example, a buyer of wheat would have the right to purchase three

tons of wheat at the established price if it makes sense to him financially, but is not requiredto do so if it doesn't. Anyone who holds an option must pay for the privilege.

The two types of options mentioned above are different. Options which give the holder theright to buy something are "call options." Options which give the holder the right to sellsomething are "put options."

Simple derivatives are usually traded on exchanges. Complex derivatives have historicallybeen traded over the counter (OTC) between the two parties involved in the contract. This ischanging, however, as governments look to create transparency in the derivatives market.

Leading up to the 2008 financial crisis, derivative products grew increasingly complex andproliferated with products such as collateralized debt obligations and synthetic derivatives


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(derivatives based upon derivatives). As a result, many people lay blame for the crisis onderivatives products and the wrong impression that risk was no longer an issue.

EQUITIES

Our equities jobs, including jobs for equities analysts, salespeople, traders and more, are allcovered within this sector.

A company's assets once all its debts have been paid off are called equities. Stocks and shares- also called equities - grant people who purchase them partial ownership over the company'sassets.

Historically, equities have been traded on big international stock exchanges, like the New

York Stock Exchange, Nasdaq, the Shanghai Stock Exchange or Deutsche Brse. At present,while they are still traded there, a growing amount of equities trading is now taking place off-exchanges, in so-called "dark pools." This is because buyers and sellers of equities oftenprefer to trade anonymously and privately to avoid influencing the price of stocks with largeorders to buy or sell.

Many different companies recruit equities staff, including large international banks,brokerage houses, agency traders, asset management firms and hedge funds.

The equities salesperson's job is to keep in contact with and win clients, whether they are richprivate individuals, pension funds or other institutional investors, and to advise them on whenthey should buy or sell particular stocks.

Salespeople then get in contact with equities traders who carry out the trade on behalf of theclient. In the simplest sense, traders act as market makers. Market makers quote clients bothbuy and sell prices for any stocks the client is interested in, while making a profit from thebid-offer spread. This is the difference between the price at which they buy the stock and theprice at which they sell it to the client.

Trading cash or simple equity products usually now takes place electronically with automatictrading systems matching buyers and sellers. A large number of equities trades are nowdetermined by algorithmic trading systems which use mathematical formulae dictating thebest investment strategy. Despite all these systems, there is still a need for humanintelligence. When large block trades are being placed, for example, execution traders mayneed to break these trades up into smaller and more manageable chunks to get the best priceavailable in the market.

Sales traders working in equities are really a hybrid between salespeople and traders. This isbecause they first recommend products to their clients and then continue to execute the tradesresulting from that advice.

Salespeople are also needed to sell electronic trading capabilities. Banks, for example, hire

individuals to pitch to clients for their direct market access (DMA), or electronic tradingsystems.


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Jobs in equities can also be for IT programmers, quants and equity researchers, all of whommay be required to support an organization's equity sales and trading capability.

In this sector, you'll find listings for debt jobs in capital markets. Debt is also called fixedincome. Debt in this context normally refers to bonds, which, similar to equities, are issuedby a company or government with a goal to raise money. The company or government sellsbonds, which are basically loans, with the promise to pay the bond holders back theirprincipal plus interest at a specific appointed time in the future. Before that time, however,bonds can be sold once again to other investors in a secondary bond market. The bond holder,who eventually recovers the principal and interest, is often one of these other investors ratherthan the original buyer. Investment banks normally act as the bond underwriters. They areresponsible for creating bonds and bringing them to market.

Before the bond matures, the bond holder receives interest payments as an exchange forlending the issuer money. Because these interest payments are a fixed cash sum paid atregular intervals, bonds are now also known as fixed income products.

DEBT / FIXED INCOMEPositions in Debt and Fixed Income

Work as a debt specialist can be widely varied. The job could include anything fromoriginating to structuring or syndicating. On the legal side, you may find work at a law firmthat deals with the legal requirements of submitting registration paperwork and other tasks.Origination specialists working in an investment bank are often senior capital marketsbankers. These jobs involve traveling, often around the world, to meet clients so they canbetter establish their financing needs and make a case for them to offer business to their bank.

Positions in structuring usually involve more work in the office. Your job will be to createdebt products to match a company's financial requirements. After that, people working on thesyndication desk ready the products for sale. It's their responsibility to calculate the bestinterest range, assess demand, and arrange correct documentation.

Fixed income job titles could be Municipal Bond Sales, Global Fixed Income ProductSpecialist, Fixed Income Trader, Investment Grade Credit Investor, Capital Markets CreditRisk Analyst or Senior Structured Finance Specialist.

Some of the skills you'll find useful when working in fixed income include analytical abilityand an aptitude for statistics, strong communications skills, multi-tasking and perseverance.

Trading

Under this sector, you'll find all of our trading jobs.


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Trading positions require tracking the markets and then buying and selling products, usuallythrough technology. Trading careers are defined by both what products are traded (such asequities, foreign exchange, or commodities) and by the type of trader.

There are several different kinds of careers in trading:

Flow traders - These are people who buy and sell financial products for a bank's clients.

Proprietary (or "prop") traders - These are a carefully chosen group of higher level traderswho trade the bank's own money.

Execution traders - These traders mainly place trades for analysts and fund managers.

Sales traders - These are a mix between salespeople and traders, recommending products toclients and executing any trades which have come about from their recommendations.

Trading roles have been significantly changed by the advance of technology over the last 10years, but investment banks also hire people for separate electronic trading divisions.

Electronic trading has sped trades dramatically, dropped the cost of transactions and greatlyincreased transparency in the markets. Using algorithms - computer systems which makedecisions on price, timing and size of an order - also shrank average trade sizes.

Automation has completely transformed the market from one where much human activitywas required into one where the computers do most of the work in executing and processingtrades. Due to this change, many traditional trading roles were eliminated. To balance this,electronic trading has created many new positions and careers in trading.

These new opportunities for finance jobs in trading include:

Quantitative analysts - Quants are brilliant at math, which is very important for gaining anedge in trading electronically. Quant jobs involve designing, developing and deployingexecution algorithms with a mathematical approach to find investment opportunities andstrategies in the market.

Consultants - It's the consultant's job to keep clients happy with services. Consultants createa number of statistical reports, such as transaction cost analysis and trade reports, to make

sure clients are taking advantage of trading tools effectively. Consultants are also able toprovide tips on improving performance.

Sales traders - It's the sales trader's job to perform the execution of trades for clients, whilealso offering a choice of the bank's e-trading products and helping a customer decide whichone suits their needs. This position requires a mix of marketing and client relationshipmanagement. Banks also hire pure salespeople.

Market structure jobs - This position is defined by research; market structure professionalsanalyze reported regulatory changes and macro trends and create reports describing theirpossible effect on the trading environment.


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Research

In this sector, you'll find all of our financial research jobs.

Financial researchers in banks supply information on equities and debt products and adviseon which particular equities or bonds to invest in. Also called analysts, these positions oftenfocus on a single industry sector or a particular type of bond investment.

Some of the main sectors within equity analysis or equity research jobs include: oil and gas,industrials, metals and mining, retail, banks and financials, technology, pharmaceuticals andreal estate companies. Equity researchers usually focus on one of these sectors, developingextensive knowledge of the prospects and financial stability of companies active within it.Using this knowledge, they give "buy," "hold" or "sell" recommendations, providinginvestors advice on what to do with their stock.

Equity researchers who are ranked well by external organizations such as Starmine andInstitutional Investor magazine are the most highly prized.

Historically, equity researchers were usually required to write long written reports advisinginvestors on whether to invest in a certain stock. These reports could be used by equitysalespeople with investment banks and brokerage houses for their own sales and to help giveinvestors information about which stocks to buy. At present, though, researchers are moreoften expected to discuss their ideas with investors and to take on more of a marketingposition, working more closely with the sales department.

Though equity researchers and research associates are incredibly important for selling equity

products, their position can be difficult because they do not generate profit directly. Becauseof this, they have been accused of prejudice, with some researchers in investment banksaccused of writing falsely favorable reports about potential clients to help the bank winbusiness in sectors like M&A and capital markets. To avoid this accusation, some researchershave moved to independent research houses. Also challenging, however, is that to produce areally good piece of research about a company, a researcher needs to have conversations withthat company's top management, but senior management may not wish to talk to researcherswho have composed unfavorable reports about the company previously.

Within the fixed income sector, researchers study the chances that the organization issuing abond will be unable to repay it. Ratings agencies like Moody's, Standard &Poors and Fitchissue ratings suggesting the chances of repayment, with AAA rated bonds the safest forinvestments and C rated bonds unlikely to ever be repaid on time. Fixed income researchersin investment banks also make these judgments and over a career in research normallyspecialize in a single type of bond - either investment grade, which are the bonds likely to berepaid, or high yield or distressed bonds, where they are less likely to be repaid on time.

FX & Money Markets


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All of our foreign exchange jobs ("FX" or "forex"), including sales, trading, structuring andinvesting, are included in this sector. You'll find FX jobs in investment banks, trading houses,asset managers, hedge funds, commercial banks and corporates (companies). Withincompanies, corporate treasury departments are responsible for managing the organization'sexposure to changes in exchange rates.

Forex jobs and money broker jobs basically include predicting how economic factors and/orgovernment intervention will cause currencies to rise in value (appreciate) or fall in value(depreciate) against each other.

FX traders working in investment banks usually focus on specific trading currency pairs. TheU.S. dollar and the Japanese Yen, the Euro and the U.S. dollar, the U.S. dollar and the Swissfranc and the British pound and the U.S. dollar are the most common of these pairs.

So-called "spot trading," where currencies are bought and sold for immediate delivery, makesup much of FX trading. A reasonable proportion of FX trading jobs also involve derivativessuch as futures. These are products in which contracts are exchanged agreeing to trade onecurrency for another for a pre-determined price at a given date in the future, as well as swapsand options. Many currency derivatives are highly liquid and traded on major exchanges. FXderivative products may also be traded over the counter (OTC), both bought and sold,between individual buyers and sellers without going through exchanges.

Today, most FX trading takes place electronically using electronic execution systems thatallow banks and corporate clients to place foreign exchange trades online without having toplace them through human traders.

Sales jobs and careers in FX are usually split into different client types. Some salespeoplemight focus on selling FX products to hedge funds, while others will focus on selling FXproducts and electronic trading systems to private clients, asset managers, pension funds orcorporates.

We also list our money market jobs in this section. Money markets are markets for short termfixed income investments over less than a year. Products traded in money markets are veryliquid and can usually be purchased and sold simply and quickly. As a result, they'reconsidered very low risk. Money market funds will invest in products like government bonds,though in a climate of governmental debt defaults, these may become far less safe and liquidthan they're meant to be.

Money market careers can include repo trading positions, in which holders of governmentsecurities sell them on to a third party but agree to purchase them back for a pre-determinedprice at an agreed date of no more than 30 days from the initial sale.

Commercial Banking


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This sector contains all our listings for commercial banking jobs. Commercial banking is abroad term applied to a number of different banking services offered to large companies,institutions and governments to help them function day to day.

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On the most basic level, jobs in commercial banking can include arranging loans (this servicealso comes in a number of different forms), offering cash management services, like helpingto decrease any tax paid by overseas subsidiaries, managing changes in foreign exchangerates or offering treasury solutions such as the administration of currencies, cash flows anddebt.

A career in commercial or corporate banking can target different industries. Commercialbankers often become experts on just one area, depending on which sector they choose tofocus on. For example, commercial bankers working with energy, mining or utilitiescompanies could be project finance experts, which would require working out a business casefor purchasing or constructing a new power plant or mine.

At the lowest end, junior commercial bankers usually begin as credit analysts, judgingcompany balance sheets and choosing whether or not to issue loans. At times they may also

join senior sales and relationship staff as they travel to sell products to commercialcustomers.

Senior commercial banking positions focus more on clients. Senior commercial bankers canbe business development managers, whose jobs require bringing in new customers, orrelationship managers, who maintain relationships with existing clients. Both of thesepositions involve wining and dining chief executives and finance officers. They also willinclude providing technical advice on a company's financing and cash flow needs.

Relationship managers will also have a support team which is responsible for handling day-to-day banking needs. If a company must raise finance, the relationship management teamalso supplies transaction and structuring advice.

Commercial banks also hire people for risk/credit assessment jobs, product positions(designing banking products to solve prevalent client problems), and in operations or treasurymanagement, in areas such as the administration of currencies, cash flows and debt.

Though some product types in commercial banking may sound dull to an investment banker,there are many of them.

As an example, the money-lending function has several different forms, such as short-termloans, overdrafts and term loans.

Cash management products and services usually include currency accounts abroad, termdeposits rates, online and mobile banking and commercial credit cards.

Commercial bankers also assist international companies with handling their businesses inother countries by supplying trade finance and trade services like banker's guarantees and

documentary collections.


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The treasury services department of commercial banking tries to protect business cash flowagainst market volatilities by using hedging instruments such as FX forwards and options.

The treasuries accept money on term deposit and are usually also involved in processingpayments using telegraphic transfer, EFTPOS, internet banking or other ways of payment

processing.

Investment Banking / M & A

In this section, you'll find listings for all of our M&A (mergers and acquisitions) andinvestment banking jobs. The phrase "investment banking" can mean different things,depending on who is using it. Broadly, it can mean all departments of an investment bank,from sales and trading to corporate finance and M&A, to capital markets, risk, complianceand operations. It can also mean both capital markets and M&A. On eFinancialCareers, wedefine job listings pretty narrowly as M&A, but relevant to the financing and infrastructure

which are necessary to execute an M&A deal.

As the very name implies, a job in M&A involves advising client companies on mergers(where two companies join business and emerge as one) and acquisitions (where one firmpurchases part or all of another).

A number of different organizations take part in the M&A market. The largest investmentbanks normally advise on and facilitate M&A deals worth $100 million or more. Smallerdeals are more often handled by advisory boutiques or by the Big Four (or other) accountingfirms.

Careers in M&A are fairly straightforward. You begin with a standard investment analyst jobfor three years, then move up to associate for three years, then move on to become vicepresident, director and managing director, though the job titles can vary depending on whichbank you've built your career in. Most M&A careers have a focus on an individual sector,such as consumer, financials, oil and gas, technology, media and telecommunications.

Senior M&A bankers tend to spend more time building relationships with potential clientsand winning new business. Historically, M&A has required mainly advising clients onpossible target companies and the dynamics of an M&A deal. These days, senior dealoriginators in investment banks are more often relationship builders who advise clients onmany of the large range of products offered by their employer along with the financingneeded for a deal, not just the deal itself.

Junior analyst jobs in M&A revolve around spreadsheets, marketing documents and financialmodels. Junior M&A bankers seldom go to client meetings. Instead, they are responsible forevaluating the financial information of target companies and composing pitch books. Theseare marketing documents that banks use to sell their products and outline details of whichcompanies a client should be purchasing or which it should be selling to.

Though analysts are the lowest ranked of M&A positions, the associates above them are alsofairly low down on the scale. The main difference is that M&A associates have slightlyincreased responsibility for transactions and projects. They can also delegate some work to

junior analysts.


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Private Banking / Wealth Management

You'll find all of our listings for wealth management and private banking jobs in this section.

Private bankers and wealth managers assist high net worth people with managing theirmoney. Careers in wealth management are usually in one of two categories:

Private bankers - Private bankers provide a more personalized level of service to wealthyclients than is available to typical customers. They help clients invest their money carefully toavoid risk that could shrink the value of their assets. They also supply advice on tax andretirement funds, help clients develop a strategy for donations to charity and advise them onthe best strategies for leaving their wealth to their descendents.

Wealth Managers/Financial Advisors - Wealth Managers and Financial Advisors helpclients buy and sell financial products, develop financial and investment plans and provideportfolio management, usually for a fee.

Clients of private bankers and wealth managers range from high net worth clients who haveat least $1 million to liquid assets to invest to ultra high net worth individuals who can invest$10 million or more. Some banks apply an even higher minimum such as $30 million to anexclusive ultra high net group.

During a private banking career, you'll probably perform one of three wide categories of job:invest money for current clients, building relationships, or handling back-office functions like

human resources or accounting.

Private bankers who work on the investment side usually either invest their clients' moneythemselves or provide their clients with extensive advice so they can invest their own money.These bankers are usually product specialists with expertise in a certain asset class, like fixedincome, equities, structured products or investments in the private equity and hedge fundsectors.

Private bankers working in relationship management have a more sales-focused position, asthey spend most of their time taking advance of connections with clients and selling thebank's services.

Relationship private banking often requires a lot of traveling and maintaining close contactwith fascinating, unusual and demanding people. After a relationship private banker has cometo understand a client's unique requirements, investment specialists are contacted to put amore detailed investment plan together.

Wealth Managers and Financial Advisors, on the other hand, will create and sometimesmanage a client's investment plan. In the past, Financial Advisors were not required to havean MBA or a BA in finance. But that appears to be changing as more and more peopleentering this field do have financial and business degrees and this is becoming the norm.

Retail Banking


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In this section, you'll find all of our retail banking jobs.

Large banking institutions often carry out transactions with other large banks or big

corporations. They also deal directly with consumers on a retail level, where jobs in thissector fall.

While these banks generally have a brick-and-mortar presence, retail banking is increasinglytaking place online, so jobs in retail banking now extend well beyond just working in abranch. Checking accounts, savings accounts, debit/credit cards, mortgages, online bankingand personal loans are all included under retail banking services, as are some insuranceconsiderations such as household and car insurance.

Some wealth management services are also included under retail banking, but rather thanoffering investment advice for wealthy individuals, this is more helping less affluent peoplegrow their finances wisely. Financial planning services supply savings and investmentadvice, generally to secure a comfortable retirement for clients.

Junior bankers working in branches will likely be those handling customer questions andcomplaints directly. They are required to service customers at the counter and recommendand sell further suitable products and services. On a day to day basis, they'll handle basicadministrative functions like opening or closing accounts, changing customer details orsetting up standing orders.

Because some of these support functions can also be carried out over the phone, retail bankshire armies of people for customer service call centers.

Graduates are often the targets of retail banking recruitment. If they start out in the branches,they are usually advanced quickly to management positions. After a two-year trainingprogram, spent learning about financial products offered by the bank, leadership andcustomer service, candidates are either responsible for managing a branch or leading a salesfunction.

There are also many other careers in retail banking outside the more traditional jobs outlinedabove.

Banks seek product managers and product developers to develop and deliver the servicesoffered to customers, including credit cards, improvements to online or mobile banking orinsurance. Naturally associated with these positions are marketing jobs, which identifyconsumer demand for products or services and develop promotional campaigns to targetthose needs. The prevalent term for these jobs is "customer propositions."

You'll also find jobs in operations management, for positions such as business analysts,change managers or project managers. These people devise operational efficiencies(including downsizing strategies), run the bank's systems and processes, diversify its productoffering and work out ways to improve business operations across finance, risk andtechnology functions.


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Risk is another important function of retail banking. This is risk at a company level, withpositions for credit, operational and market risk managers, but it also includes advising onwhether to issue personal loans and mortgages. Fraud prevention jobs are also essential inretail banks' risk divisions. Jobs can include protecting customers' personal details (orinformation security), anti-money laundering (AML) or preventing bribery and corruption.

Capital Markets

In this sector, you'll find all of our capital markets jobs. Work in the capital markets divisionof investment banks is greatly varied. Your job could involve anything from originating tostructuring or syndicating. Origination specialists are often senior capital markets bankers.These jobs require large amounts of travel as the specialists need to meet clients personally tolearn more about their financing needs and try to convince them to offer business to the bank.

In comparison, most structurers work in the office. They create complex financial products tomatch a company's financing needs, which are established by the originators.

The people working on the syndication desk must work to prepare the market for the sale.They work out the best price range for the product, assess potential demand for it and puttogether all the correct documents.

Financial products are created or "originated" in the capital markets departments of investment banks. Capital markets bankers working here create the securities needed bycompanies and institutions who are trying to raise money on the public markets. Their two

main products are stocks, traded on the equity capital markets, and bonds, which are tradedon the debt capital markets.

Investment banks are the "underwriters" for the company issuing stocks or bonds. Inexchange for a fee which is called the "underwriting spread," they take on the risk of issuingthe securities and carry out all the work required to bring them to market.

Debt capital markets (DCM), sometimes also called fixed income markets, handle debt thatcan be sold in the form of bonds, including treasury bonds issued by governments, investmentgrade bonds issued by companies and high yield bonds, which are riskier and as a result, paya higher rate of return.

Equity capital markets (ECM) bankers assist companies to raise money by issuing shares. Asunderwriters, they guarantee that the shares the company is issuing will be sold at a certainprice. If the bank is incapable of finding enough buyers to purchase the shares at the pricepreviously agreed with the client, the bank must buy the shares itself. These shares could bepart of an initial public offering (IPO) or a rights issue.

Jobs in capital markets could also involve issuing more complex products, like equity-linkedsecurities (bonds that can be changed into equities at a previously determined price) andderivatives.


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In order to secure a capital markets vacancy, you should have a strong, analytical ability andstatistical aptitude, strong communication skills, ability to manage multiple projects andperseverance.

A few of the more common careers and job titles in capital markets are: Senior Originator

Specialty Lending, Junior FICC Structurer, Equity Derivatives Product Control, Risk Manager and Debt Capital Markets Analyst.

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