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Market Impacts on Bond, Currency Traders

While bond traders ride the rodeo that is today's mortgage sector, currency traders are enjoying their side of the business - and job opportunities are revving up with the trading activity.

It may not come as a surprise that hiring among bond traders may be tepid for a while. Market dynamics aside, investment firms are pretty well-staffed in the area. "They grew this side of the business quite a bit in the past four or five years, but now there's a lot of turbulence in the market," says Alan Johnson, managing director of the New York compensation consulting firm Johnson Associates. Those who trade bonds tied to mortgages, and who manage to hang on to their posts, are going to see their bonuses drop some 20 to 40 percent this year, Johnson believes.

It's important to remember there are folks on the bond side who may not be linked to the mortgage end of the business, notes Johnson. "Bond trading can do well in volatile times," he says. Still, the mortgage sector's problems, and its losses, are trickling over to all those in the bond departments.

Larger investment firms might continue to shake out bond people, though the numbers won't be as sizeable as some might think. The reason? These departments remain smaller than most. "You might hear of a loss of 100 people here or there," Johnson says.

Others may find more security in moving from the bond sell side to the buy side. "These are very narrow skill sets in bond trading, and that's why they make as much as they do," says Johnson. Those who move to other finance posts are likely to see a drop in pay, simply because of those same narrow skills sets. "Some of these people just don't do as well at the next place, especially when they think they can put ... in the time and then eventually go back to the hot Wall Street job."

For Currency Traders

Currency traders, on the other hand, aren't facing such gloomy prospects, as fluctuations in currency rates drive their business. Craig Stocksleger, a partner at Comprehensive Recruiting in Tempe, Ariz., notes that hiring is strong in this sector. "The strategy side of the business is very busy right now, especially because of the volatility," he says.

But only very focused, experienced and driven folks need apply. Says Stocksleger: "Firms are looking for people with the background in the field. They want people who've been there and done that, so to speak, and they want currency traders and currency specialists to have strong relationships."

Of course, pay remains directly related to performance. Base salaries are averaging $150,000 or so, with the bulk of compensation coming from bonuses. Plus, activity in the UK continues to grow, prompting some major New York investment firms to beef up London operations.

What are your survival strategies for this market? Post a comment below.

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AUTHORAnonymous Insider Comment
  • Jo
    Johanna
    30 August 2007

    What is good field to begin right after college for someone who is interested in currency trading? Or a good place to begin learning more about it? Any advice is greatly appreciated. Thank you.

  • Sa
    Sam S
    30 August 2007

    I agree, the fx business in London is firing on all cylinders and most of the top investment houses are looking to make additions to their teams.

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