Bond Basics and Learning to Play the Game

I started trading convertible bonds at the end of 1993. I had been an options trader for about a year and a half, working for PaineWebber, the old-line wirehouse firm that ultimately was taken over by the big Swiss bank UBS in 1999. I’d been fascinated by options when I studied them in business school and was thrilled when PaineWebber offered me a job in 1991 doing options research.

It was a tough time to be coming out of business school. The economy was still in recession and Wall Street was not hiring. We were only a year or so removed from the collapse of Drexel Burnham Lambert, the banker that popularized junk bonds as a way of paying for hostile takeovers. With Drexel went sentiment on the Street, at least for a while. I had been fortunate to get a summer internship in 1990 in Goldman Sachs’ fixed-income division. I’ve never been particularly good at interviews, but for whatever reason, I had my “A” game the day Goldman brought me into New York.