How much am I worth? Interest rate exotics trader

A panel of specialist headhunters give their assessment of typical London pay

packages: interest rate exotics trader - salary 75,000-130,000; bonus:

between 0 and 300%, depending on performance/expertise.

The Collins English Dictionary defines exotic as something with a "strange

or bizarre allure, beauty or quality": for those wanting to make money in a

financial environment as depressing as that of 2003, becoming a trader in

exotics exerts a similar appeal.

It is easy to see why. The past year has been good to traders in interest rate

exotic products, with aggressive pricing and large trades playing a

significant role. This has been reflected in the employment market.

"We continue to see relatively strong demand from financial institutions for

high calibre individuals with demonstrable track records," says Richard

Fisher, a consultant at Alexander Mann Global Markets.

"Prospects for the interest rate exotics market remain fairly upbeat, although there

are signs that the market might be changing," adds David Moyle, head of

quants research and trading at Napier Scott.

He believes the industry is becoming commoditised, while changes in international accounting regulations in the past two years have imposed greater transparency. It all means interest rate exotic traders are no longer quite as exotic as they once were - but at least they are making good money.

The best placed are those with a strong personal track record working in

an institution that itself has a good reputation in the sector. He or she

should also understand the whole market - as opposed to just the product

being traded - and be able to work well with the salesforce.

Richard Fraser of RJF Global Search adds that an excellent academic

background - probably in maths, physics or engineering - is vital, with a

quantitative postgraduate degree not unusual.

Headhunters specialising in exotics say the level of remuneration varies

widely depending on point of entry and institution.

Moyle says a trader with five or so years experience can expect to pull in a

base salary of between 80,000-100,000 with total compensation and other

benefits pushing their take home package to anywhere between 300,000 and

500,000.

"In general, the people who are considered to be of most worth are those who

have the ability to develop existing systems rather than to just maintain

the one in place," says Moyle.

Fisher broadly concurs with these salary estimates, though he suggests senior

traders could be earning a base salary of 150,000.

Fraser believes some of the very top notch traders in the industry - with over

six years behind them, an A1 track record and good contact book - could be

taking home anything up to 1m.

Despite recent changes in the marketplace that are making exotics trading

more standardised, the general outlook remains healthy.

AMGM's Fisher says institutions will continue be on the lookout to upgrade

their staff - particularly those eager to gain an edge in proprietary trading.

This, rather than servicing clients, looks as if it will drive the market

forward, with Fraser expecting a pick-up in hiring soon.

"Most recent activity has been from financial institutions building

proprietary trading desks," he says.

Figures and commentary provided by RJF Global Search, Napier Scott and

Alexander Mann Global Markets.