What's your take on starting a career in Treasury trading? I'm aware that given the advent of electronic trading, liquidity is tight; but are Treasury desks still profitable? I guess most Treasury trades must take quite large prop positions to generate a substantial P&L. Any clue -- ball park range should suffice -- on how much these traders make? Mid-six figures or low seven figures?Thanks.

Step 1) Read "Trading the Bond Basis" by Galen BurghardtStep 2) Realize everyone has done everything worth doing alreadyStep 3) Think of something better.All facetiousness aside, it's a very mature field.

Thanks for the useful advice.Anyone else?

With the exception of the few large govt bond dealers who make money leveragng off large captive clients (e.g goldman), govt bond trading has been reduced to a necessary service which implicitly is not profitable (and very likely a liability).... most dealers use the biz to express prop views at their side of of the market, so most tsy desks are very model-based, relying on various rich/cheap models... the very large dealerships (such as goldman) have captive clients who are committing to use their desk for large interest rate flows, and this is a very valuable franchise, as there is actually reasonable bid/offer involved, and the front-running aspect can be quite lucrative....hope that helps

Ill second that...Although the market is very liquid, the big treasury trading desks can take a decent enough bid offer from reliable customer flow, and also from issuance activities, especially desks that have the first bid on new government issuance.Also, as already said, as many treasury desks now tend to take much more prop. risk, many desks can see decent end of year P&L's. I know of one bank in particularly where its not uncommon for the Euro Govies desk to make more than the IR Exotics team in any given month. At the end of the day, if the product is more liquid, you need to take more risk to make more return. If you scale the level of this risk up to good size, your return can be enough to make your activity worthwhile. The only problem is convincing your risk management guys.....PRen.

Do you have a concrete offer of a role in treasury trading at a major bank? Grab it with both hands, you will become rich. How rich is up to you, and to how the market evolves. It's a common myth that market-making is dying, that products are commoditised, that spreads are too narrow, and all that's true, but there's still (a) a shortage of younger market-makers coming up through the ranks, and (b) volumes are holding up very well indeed. Bonuses have never been higher.