Master in Finance graduates conquered the Trading world at JP Morgan
Marie Legrand and Virginie Marx, EDHEC alumni from classes of 2021 and 2022, earned a double degree in Finance – Master in Management, Finance and MSc in Financial engineering. They both secured positions in credit trading at JP Morgan. They recently had the pleasure of sharing their professional experiences and insights into CDS Index and HY trading with students enrolled in the MSc in Financial Engineering during the Alumni Insights events - a series of events organised by the graduate finance programme, where Alumni share their career paths.
Could you describe what your job entails?
I am a Credit Trader at JP Morgan in London. My job consists of providing liquidity to clients interested in trading credit indices. Specifically, I provide bids and offers to a diverse range of clients (asset managers, hedge funds, bank desks, etc.), enabling them to either sell or buy protection on credit indices. After these trades, I work to recycle the risk via client or broker trades and as well to hedge the risk via other credit indices, stock indices or single name CDS.
I am a HY Credit Trader at JP Morgan in Paris, working with both bonds and CDS traders. My main responsibility is to provide liquidity to clients across EMEA, including Continental Europe and the UK. When clients contact us, we offer bids and offers, adjusting pricing based on market conditions, macro environment, and company fundamentals. This enables us to tailor a unique liquidity strategy, and based on these factors, we execute trades collaboratively.
What would you say is the main difference between Index and HY Credit Trading?
Virginie and I both work in credit trading but while she focuses on High Yield companies, I focus more on the macroeconomic environment.
Virginie has a portfolio of companies which she knows by heart – from the financial statements to the last market headline – and that she trades actively.
An index is a basket of single name companies and is a benchmark for the state of the economy. Macroeconomic data or headlines – like the FED decisions or inflation data – will more directly impact credit indices. It is like comparing the Apple stock with the S&P 500 index.
To hedge herself, Virginie could use the bond or the CDS of a company she just traded or trade index with me. More rarely I could trade with her to hedge specifically against the default of one company.
You both work at JP Morgan. Is it your first job?
Yes, it is my first job. While still a student at EDHEC, I undertook a summer internship with JP Morgan, specifically within the sales team. I was then contacted by the HY trading team and got a job offer. I started in London and then joined the team working in Paris.
It is also my first job which I signed right after a summer internship in the team. I started directly as a trader at JP Morgan in London after finishing my MSc in Financial Engineering.
Marie, would you say this is the kind of job you were aiming for while studying?
Personally, I consider the shift to trading a significant development as I had no intention of pursuing such a career.
When I started at EDHEC, I even began my gap year only applying for sales jobs. It was only later, during the same sales role in London at JP Morgan that I realised I could also pursue trading. The opportunity presented itself, offering a chance to explore both sales and trading. I had never experienced it before, and to my surprise, I loved it!
What is the biggest difference between sales and trading?
People often assume it’s about how we interact with clients. Personally, I believe the most significant difference lies in how we approach risk taking. Sales professionals still engage in risk-taking, a fact that is often overlooked. However, the way we take risks is geared towards fostering stronger client relationships.
Salespeople operate as the middle ground between traders and clients, striving to manage this relationship, which introduced the most significant risks. In contrast, traders face risks originating from the market and the decisions they make. Ultimately, traders act as the leaders of both the trade and the relationship because they make the final decision on whether a trade will be executed or not.
Sales play a crucial role in how they manage relationships with clients. Traders also need to build relationships and possess relationships skills, internally and externally. We engage in discussions with our sales team so they can better comprehend our roles and the risks we take daily. We also communicate our intentions, such as the desire to focus on a particular trade.
Internal relationships are essential for sales to effectively support our work. They must understand our strategies and the risks we wish to undertake. This ongoing dialogue is crucial, as it allows us to convey our goals and objectives.
External relationships with clients are vital. Interactions often revolve around high-yield investments, delving into fundamentals and navigating stressed or distressed situations.
Engaging with clients enables us to exchange perspectives, especially since they invest in the same companies as we do. Understanding their strategies, such as when they plan to sell or buy risk based on market conditions, volatility, and other factors, is crucial.
While sales excel in building relationships, it’s equally important for traders to recognise this and place emphasis on it. Without a deep understanding of our clients, sales counterparts, and other daily interactions, one can be a trader, but not necessarily a proficient one. Building and maintaining these relationships is fundamental to success in the trading world.
What would you say you learned at EDHEC and what you learned on the job?
At EDHEC, we gained a wealth of technical skills and grasped fundamental market concepts during our education. During the Master 1, we dove into corporate finance, accounting, valuations, etc., laying crucial finance foundation. Focusing on stressed situations and specific companies emphasized the importance of mastering market and valuation basics.
I agree with Virginie. EDHEC provides a solid foundation for essential knowledge needed for interviews and starting a job. However, when you begin your job, there’s a need to start fresh, learning about your team, clients, and market, building from the ground up.
Marie, for a student who is seeking a trading position, what tips would you give them?
I believe one of the most crucial aspects when interviewing for front office positions, particularly in trading, is the ability to withstand stress. It’s essential to thrive under pressure and find enjoyment in it. A high resistance to pressure is a key attitude.
Another significant quality is curiosity. Remaining curious and motivated is essential because the job demands quick learning of basics and on ongoing adaptation to ever-changing markets and diverse clients. Being proactive and reactive is vital – constantly seeking new ways to enhance your job while swiftly adapting to client inquiries and market movements, particularly in a flow desk.
How do you relax?
To unwind, I have found the best approach is to fully disconnect after a day of intense focus and pressure – I spend time with friends, hit the gym and enjoy life. It’s crucial not to carry the stress from a trade into the night; otherwise, it affects the next day. Starting each day with a clean slate is vital.
Since the market closes at 5 p.m., there’s little we can do, which brings a sense of peace. Achieving peace of mind becomes easier when you know there’s nothing to be done until the next morning.
What is your best memory from EDHEC?
One of my best memories, especially upon returning from London to Nice, made me realise how fortunate we were to be on the Nice campus. Studying all day in the library and then casually grabbing snacks, followed by heading to the beach with friends, playing music, and enjoying simple moments are truly cherished memories that we might overlook while experiencing them but hold great significance.
My best memory isn’t just one specific moment but revolves around association life. Spending time with friends made during these moments has been enriching and a significant value add to EDHEC. The school fosters collaboration among various associations, teaching us the importance of roles within an organisation and working toward a common goal. Even now, this network continues to be valuable, both personally and professionally.
Any last word for a day and for the alumni community and the current student?
At EDHEC, we are truly fortunate to have exceptional teachers and courses. Despite the challenges of finding a job, we are well-prepared for the job market and interviews. Our extensive network is a valuable resource that students should use more – it would certainly be beneficial.
I’d advise focusing on what genuinely interests you and staying motivated. Consider what you think you’ll enjoy in the long run, as the end of EDHEC is just the beginning of a more extensive journey. Know your preferences, stay motivated, and remain curious about your chosen career.