What is structuring?
In finance, an exotic derivative is a derivative which has features making it more complex than commonly traded products (vanilla). These products are usually traded over-the-counter (OTC), and are structured and tailored to meet clients needs.
Structurers design, structure, market and use exotic and structured products. This is an extremely niche role in terms of knowledge. You will need a passion for derivatives with knowledge of the design, structure and use of exotic and structured products. Products may include:
- Non-generic swaps
- Exotic options
- Derivative embedded products
- Structured equity and credit-linked notes
- Fix and commodity-linked notes
- Interest rate products
- Structured debt
If I work in structuring what will I be doing?
It is the role of structurers working in the different markets to assemble complex exotic derivative products on behalf of clients. Syndicators market and sell these products communicating between the client and the structurer.
Structurers have the best of both worlds: they have client contact like sales people, and market exposure like traders. A client calls a salesperson and says they want to hedge their exposure to a particular currency for example. It is up to you to put together a product that meets their needs, given current market conditions.’
Your duties could include:
- Pricing and structuring of non-generic swaps for asset-liability management
- Using option embedded swaps to reduce clients interest rate exposure
- Pricing path-dependent option structures for trading and risk management
- Structuring a LIBOR range accrual structured note
- The design and structuring of equity-linked notes
- Designing and structuring interest rate linked structured notes
- Reverse engineering of exotic equity linked note term sheets
How do I get a graduate scheme / internship / entry level job or career in Structuring?
Obtaining a graduate scheme, internship or entry level role in structuring can be very challenging and competitive – though very achievable by getting your application, CV, interview and general approach right. You can guarantee that ninety percent of applicants for structuring roles will not know how to apply, so getting your application in the top ten percent makes things a lot more achievable.
Approaching the company in the right way will make all the difference. Combining the right approach with a strong interview (and in some cases assessment centre) writ a strong focused tailored CV will go a long way. Make sure you have gone through the free videos on this sight by entering your name and email address in the top right of this screen underneath the video. Once you have filled this in you will have instant access to everything you need to secure your career in structuring.
