Now that ISDAs are the topic of the day, here’s a funny story for you. Once, I was asked to make a market on this absolutely absurd swap…..it had 11 different legs, was contingent on time, and involved some sort of volatility shift. I don’t even remember the full details (lol). I tried plugging it into the pricer (something every exotics desk has), but the thing just wouldn’t compute. So I brought it to my boss. He let out a sigh and said, “Go to the worst desk you know, two average desks, and the best desk you know. Get quotes for the other side of the trade and just quote the client the mid of that.” So simple, yet so effective. Whether you’re trading wildly illiquid exotic notes or selling apples at a farmer’s market, pricing always comes down to one thing: supply and demand.