How much am I worth? Credit derivatives trader, international bank

A panel of specialist headhunters give their assessment of typical London pay packages: Credit derivatives trader, international financial house: salary between 50,000 and 150,000, bonus up to 500%

Given the doom and gloom in the City these days - when it is virtually impossible to open the papers without reading of another batch of job losses or dire profits warnings - it comes almost as a shock to find a sector where prospects are encouraging.

Indeed, not just encouraging but positively booming.

Richard Fraser of RJF Global Search said: "The year 2002 will be remembered as one of great opportunity in the global credit markets." Credit derivatives had been a particularly healthy market with no immediate sign of letting up.

Shaun Springer of Napier Scott was similarly bullish, arguing that credit default swaps - traded by vanilla credit derivatives traders - had come of age.

"With large multinational corporate defaults on the rise and global economies teetering on the verge of near meltdown - not to mention the impact of 9/11 - it would be an understatement to suggest that it hasn't been an interesting time in the credit markets," he said.

With the market being relatively new, which means there is a relative shortage of professionals with a good track record, investment banks have been moving to merge cash and credit derivatives teams.

Fraser says credit derivatives are changing the way credit is traded in the secondary market and is improving the financial system's ability to hold credit assets.

A vanilla credit derivatives trader with three to five years experience can expect a 65,000 to 85,000 salary, with a bonus of perhaps 150%-250%.

But someone who trades more esoteric structured products such as credit linked notes, credit options and indexed products can much more. With over five years experience and a good track record, they can expect to pull in an 85,000-110,000 basic, with a bonus of 200%-500%.

Emily Gummer of Alexander Mann Global Markets says a senior exotic credit derivatives trader (director level) at a bulge bracket house can expect much more: a total package of between 800,000 and 1.3m.

So what sort of a person makes a successful credit derivatives trader?

Gummer says the more exotic the products traded - with the trader having to create and structure products as well as have a good hold on risk and pricing - the more mathematically astute the trader should be.

"In a nutshell, a vanilla credit derivatives trader can get away without being too mathematical - though the most prominent are extremely numerate - while an exotic trader needs the math skills of a quant and the market savvy of a credit trader," she says.

"Good opportunities still exist for the best traders with a successful track record, particularly for those with hybrid skills," says Fraser.

Many people believe the default market has yet to peak, with profits expected to rise through 2003 and beyond.

The immediate future for credit derivatives specialists, at all levels, looks bright - which is more than can be said for most City professionals right now.