Beta Career Series Talk – Fixed Income

August 13, 2009

Mr. Ashish GuptaAbout the speaker: Mr. Ashish Gupta

Ashish is currently managing the G3 Interest Rate derivatives trading and Interest Rate Risk management for Reliance Industries Limited. Before he moved to Reliance, he was Vice President with the Structuring desk at Citigroup for 3 years. Additionally, he was instrumental for growth of the structured options business. Prior to Citigroup, he spent 3 years with ICICI Bank Limited at their International Banking Group and was heading the treasury at Offshore Banking Unit with responsibilities to head G3 Interest Rate Derivatives trading, G3 Asset & Liability Management and Fixed Income Bond Investments and Trading.

He started his career in treasury at EXIM Bank of India, Mumbai and was in charge of Asset & Liability Management and rates trading in INR rates. After spending 2 years with EXIM Bank of India, he went on to pursue MSc (Financial Engineering).

Ashish, is also a visiting faculty on Fixed Income, Derivatives and Structured Options. By education, he is B.Com (Honors), MSc (Financial Engineering), Chartered Accountant (FCA), Chartered Financial Analyst (CFA Institute, USA), Financial Risk Manager (GARP, USA), and Certified Treasury Manager (ACTM, USA).

Session 1: Careers & Opportunities in Fixed Income: Structuring & Trading

The first talk targeted the 1st year students interested in financial markets careers. Mr. Ashish Gupta, the speaker kept the session informative and interactive. He shared his experiences in both structuring and trading. He gave examples of how trades for a big corporation might be structured. He described the way the trade would go from a sales person who would initiate discussions, to structure who would create and price the product, to a trader who would trade it on the market. He narrated anecdotes that highlighted divergence in theory and practice, and brought into focus the transaction costs and other things which theory ignores but which make a difference in practice. He responded to a question on work-life balance by saying that he goes to office, problem solves for most of his day and comes back home. The problem solving might be for a client or for a proprietary desk or the sales team.

Engaging the first years in a lively discussion

Engaging the first years in a lively discussion

The session focused on the skills needed to enter and be successful in the industry, like a feel for the markets, quick decision making and being aware of the major goings on in the world. Ashish advised on various financial indicators that students can track to follow the financial situation like the LIBOR, the US-Euro, USD-INR rates and debt issuance by governments. Students really enjoyed the session and learned about a career in trading and structuring.

Session 2: Fixed Income Hedging & Trading

The second talk was a session on advanced fixed income ideas. The speaker himself being a senior trader discussed trading and hedging strategies relevant to the current markets. The audience were 2nd year students doing a course on derivatives and risk management as part of their chosen electives. The speaker explained the pit-falls of employing a few trading strategies which might seem very profitable in the current market conditions but in reality might play against you in the long-term. He gave real life examples of trades in interest rates that look very profitable at first sight but will require significant changes in the interest rates prevailing to break even given the spreads and transaction costs.

The second years are explained the intricacies of trading strategies

The second years are explained the intricacies of trading strategies

The session was assisted by Bloomberg captures of market data and an explanation of what one might expect to do in rates trading. All-in-all it was a very interesting and interactive session with focus on practical aspects of the job as well as an informative session about the anomalies caused by perceptions and risk-aversion.