By Madeleine, Julia & Nils
Have you ever wondered what the many various employees at Nordea Markets do? We have, when we sat foot on the trading floor on the very first day of our internship. To give you a feeling of the varied skills and in-depth expertise here, and why they are all needed, we will zoom in on the people who work with FX (foreign exchange, i.e. currencies).
FX – What’s it about?
When we first came to Nordea Markets – weeks ago – we knew that some of the people deal with the FX markets, but we had no concept of just how diversified the way of working with FX markets could be. During our time here, we have so far, spent two weeks on several FX related desks.
Focus has been on the two desks that handle small and middle-sized companies. Yet we have also been introduced to the large companies and institutions desk as well as the FX trading desk. We will spend the next week at the macro research desk. Despite all these desks being FX-oriented, the typical work day between them will differ quite a bit. Let us describe these desks and our insights into how they differ.
The different desks expertise and high value
Macro Research: The macro research desk does a lot of interesting research on all aspects of the macro economy, which currency and FX are important components of.
FX Sales and Advisory for small companies, i.e. advice on how to handle currency risk. Often these smaller companies do not have (much) knowledge about their FX risks, and even less about how to deal with them. Therefore, the people at this desk generates much value to the customers just by informing them of their exposure and offering simple ways to minimize the risks, enabling the customers to stay focused on their company’s core business.
FX Sales and Advisory for medium sized companies, involves more advanced products and solutions like different kinds of option strategies, as these companies typically have more resources to invest and more to gain by handling their FX risk.
FX Sales and Advisory for large companies (like hedge funds etc.) These clients are usually classified as professional investors or eligible counterparties which means that they, themselves have profound competences within finance and FX hedging and thus have less need for advisory. The tempo here is high, and the competition is tough for the banks within this client segment.
The Trading desk for FX and FX products handles the FX risks that are transferred to the bank because of the clients’ hedges.
What’s stocky-nocky, -loonie …?!
Those who work with FX have developed a special lingo, which was very confusing to us at first but that we have now learnt to master.
Quiz: Can you guess the currencies?
Halfway through our internship
Now that we’re more than halfway through our internship, we have understood that Nordea Markets consists of a lot of specialized and highly skilled people, each of whom has a function that is an indispensable piece of the Nordea Market puzzle. Furthermore, it has also become crystal clear to us why so many people want to work with FX – let alone here at Nordea Markets – it’s because it’s interesting and fun.
Talk to you later!
Correct answers to the currency quiz:
- Currency pair SEKNOK (Swedish krona – Norwegian krona)
- Currency pair GBPUSD (British pound – US dollar)
- New Zealand dollar
- Australian dollar
- Currency pair CADUSD (Canadian dollar – US dollar)
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