what is a "pricing" developer

[stubarny]

Hi,

I keep coming accross VBA jobs specialising in "pricing" for investment banks.

Please could someone tell me what these jobs actually do? Why would an investment bank need to price products? - surely the market exchanges set the prices offered to buyers and sellers?

Thanks,

Stu

 

[Martinghoul]

You need tools to price OTC products, whose prices are not directly observable in the mkt. Such products are often priced using models that are calibrated to prices of related securities for which mkts are available.

 

[stubarny]

Thank you