My experience as a trading floor intern at CIC Market Solutions
In this article, Tanguy TONEL (ESSEC Business School, Global BBA, 2019-2023) shares his professional experience as an intern at the Bordeaux trading floor of CIC.
About CIC Market Solutions
Logo of the CIC Market Solutions.
Source: CIC Market Solutions
I joined the trading floor of CIC Sud-Ouest (the South-West branch of CIC) which is divided in two desks (FICC – Fixed Income, Currencies and Commodities, and asset management) to provide personalized advice to local corporate clients for their investments and risk management. There, I assisted sales and asset managers in their daily duties.
As an intern, my tasks were very diverse as I have been assisting both FICC and asset management desks. In a day, I would operate the trades reconciliation, monitor the limit orders execution for the sales traders, research and analyze data for the asset managers in preparation of client meetings and do reporting to track the performance of investments. Finally, I helped with management control and middle office tasks such as new clients’ registration.
Required skills and knowledge
While some technical skills such as Excel/VBA are welcomed, the most important skill to have is curiosity. Indeed, as financial markets are constantly evolving it is important to look for anything that can help explain any change, whether in the products’ performances, in the regulatory environment or in clients’ demand to react proactively.
What I learned
During the internship, I learned about the financial solutions provided by a trading floor. On the FICC desk, I was exposed to derivatives and other complex products. On the asset management desk, I discovered the world of EMTNs (Euro Medium Term Notes) which are structured products.
Overall, the internship allowed me to get a broader understanding of the financial markets as I could see the impacts of the markets and the broader economy on clients’ needs, and the impact of client’s needs on the type of products offered by the bank.
Financial concepts related my internship
Euro Medium Term Notes (EMTNs) are a type of debt security that is issued by large corporations, financial institutions, and sovereign governments to raise funds for financing purposes (so the bank can loan money). EMTNs are similar to traditional bonds in that they pay a fixed or floating rate of interest and have a maturity date. One of the key advantages of EMTNs is their flexibility. They can indeed be tailored to meet the specific needs of investors. In practice, the structurers can work on guaranteeing the capital, on the yield… They usually obey rules (such as “The EMTN pays 7% per year for 3 years, then the spread between a rate and another. When the EMTN has paid 22% or at the end of the seventh year, the product ends, and the investor gets his or her capital back.”).
Financial derivatives are financial instruments used to manage risk. They derive their value from an underlying asset or group of assets. Derivatives can be sold for a wide range of assets such as interest rates, currencies and commodities, which are traded by the FICC desk.
There are several types of financial derivatives. The best-known include futures contracts, options contracts, swaps, and forwards.
- Futures contracts are agreements to buy or sell an asset at a predetermined price and date in the future.
- Options contracts give the holder the right, but not the obligation, to buy or sell an asset at a predetermined price and date in the future.
- Swaps are agreements to exchange cash flows based on different financial instruments, such as interest rates or currencies.
- Forwards are similar to futures contracts, but they are customized agreements between two parties rather than standardized contracts traded on an exchange.
Structured products are financial instruments that are created by combining multiple financial assets, such as stocks, bonds, and derivatives, into a single investment product. These products are designed to meet specific investment objectives, such as providing income, capital protection, or exposure to a particular market or asset class.
Structured products are typically created by financial institutions, such as banks or investment firms, and are sold to investors. They can be customized to meet the specific needs of individual investors and can be structured to provide a range of risk and return profiles.
Some common types of structured products include:
- Principal-protected notes: These products provide investors with a guaranteed return of their initial investment, while also offering exposure to the performance of an underlying asset or index.
- Autocallable notes: These products provide investors with a fixed income stream, while also offering the potential for higher returns if an underlying asset or index meets certain performance criteria.
- Reverse convertibles: These products provide investors with a fixed income stream, while also exposing them to the risk of a decline in the value of an underlying asset or index.
Why should I be interested in this post?
The trading floor is the link between the financial markets and the rest of the business world. Understanding the products offered allows one to get a better grasp on both sides of the economy.
Related posts on the SimTrade blog
▶ Colombe BOITEUX Métiers de la finance : sales
▶ Alexandre VERLET Understanding financial derivatives: options
▶ Alexandre VERLET Understanding financial derivatives: futures
▶ Alexandre VERLET Understanding financial derivatives: swaps
▶ Alexandre VERLET Understanding financial derivatives: forwards
▶ Akshit GUPTA Equity structured products
▶ Shengyu ZHENG Reverse Convertibles
Hull J.C. (2015) Options, Futures, and Other Derivatives, Ninth Edition.
About the author
The article was written in June 2023 by Tanguy TONEL (ESSEC Business School, Global BBA, 2019-2023).