Hugh Edmundson (S'12)
Computational Finance and Statistics double major, Morgan Stanley intern
Thriving on the Trading Floor
Hugh Edmundson (S’12) doesn’t just deal with high-pressure situations. He thrives in them. This past summer, he spent 10 weeks on a trading desk at Morgan Stanley, working 80-hour weeks shoulder-to-shoulder with his boss and his boss’s boss. He loved every minute of it.
“I really enjoyed it,” said Edmundson, a senior double majoring in Computational Finance and Statistics. “Morgan Stanley is a place where, as an intern, you immediately see the results of your actions. We were able to see that a trade worked out two hours after we made it. That fast feedback cycle makes it easy to learn quickly, and it hopefully makes it easy to stand out a little bit too.”
Edmundson definitely stood out on the structured credit desk. On the last day of his internship, Morgan Stanley offered him a job. After graduation, Edmundson will head to New York City to begin his position as a structured credit products and credit derivatives trader. In that role, he’ll use mathematical tools to design and sell a product called a corporate credit default swap, which investors purchase as a type of insurance to protect them in the event that the underlying corporation goes bankrupt.
“Essentially, we sell life insurance on companies,” Edmundson explained.
A native of New Orleans, Edmundson choose Carnegie Mellon for its strong computational finance program that provides students with a solid background in mathematics, probability, statistics, and applications of these disciplines to finance. It also emphasizes business practices, which is right up Edmundson’s alley. His father, uncle and both of his grandfathers started their own businesses, and Edmundson is on pace to follow in that family tradition.
During his sophomore year, he had an idea for a business that revolves around retrofitting homes to be energy efficient. He worked out a business plan, submitted it to three business plan competitions, and won two first-place awards and one second-place award.
“My basic idea was to come up with a way to help homeowners maximize their savings with a home energy retrofit without taking a financial risk up front,” Edmundson said.
He developed a complex statistical model that predicts the most cost-effective improvements homeowners can make. He’s already retrofitted four homes — updating water heaters, insulation, refrigerators and lighting.
“I think we did an effective job of proving out the model,” he said. “One of the things about my model is that homeowners only begin paying the company back for our initial investment when they see the savings in their home energy bills.”
Edmundson plans to put the business on the back burner as he begins his career on Wall Street, but he has every intention of seeing it through. For now, he’s ready to get back to the fast-paced environment on the trading floor.