Fixed income vs Equity trading desk at BB? Why are trading desk at BB down year over year? Fixed income desks In particular! Future of trading leading to full automation?

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Fixed income desks are mostly down due to increased balance sheet requirements. Buy side is trying its best to use all-to-all venues/agency models for trading (MarketAxess, Brokertec to name a few). Automation is definitely part of this - if you look at on the run treasuries, just about all BBs and now some quant brokers are engaged in automated market making. It’s going to affect the less liquid and more exotic products less in the short term, but that can change in the future.

Equity desks suffered a similar fate a while ago but I think it’s leveled out. You still have high touch desks responsible for derivatives (options, swaps/delta one) and for more complex transactions like block trades, program trades and ETF creation/redemption. They are running lean and mean these days and there is also an emphasis on low touch (algo/DMA) sales and coverage, where many people have a hybrid finance/tech skill set and where automation has also reduced headcount.

I would say the real winners here are the buy side PMs and traders. They are taking advantage of regulatory and market structure changes and are holding more responsibility than ever for best execution principles. There are still opportunities on the sell side but they tend to be more specialized and more competitive than they used to be

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Jesus. H. Christ. This is correct.

My personal belief is the above is true, but that having been said, ABS, CDO/CLO, CMBS, RMBS are still lucrative places on the sell side.

Bravo ExTrader. You nailed it

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