The sales and trading division of an investment bank is a front-office role and is more commonly known as the global markets division, delving into all different kinds of asset classes such as equity, fixed income, commodities, derivatives, etc. This article will briefly outline the nature of a role in this division, how to break in, and the skills needed to flourish in the Sales & Trading division.
This division can be differentiated from the Investment Banking division as it is more dynamic and is associated with high risk, high stress, and an intense working environment. As IBD deals with financial modelling, pitching decks (presentation slides), and due diligence, it can seem very repetitive and mundane to some who are adrenaline junkies and enjoy the thrill of high intensity. The Sales & Trading division can be very versatile, ranging from many roles such as salesperson, trader, structurer, or researcher. This means that the division can capitalise on the unique set of skills you ascertain and can develop them into a meaningful purpose at the firm.
Salespeople market products to clients and persuade clients to place trades within the salesperson’s bank or investment firm. The salesperson researches to build a portfolio to pitch to clients that will be attractive to their business model. This group stays up-to-date with investment news, current market conditions, and quarterly earnings reports. They also converse and maintain relationships with traders and researchers so they know what each asset class is trading at and can quote a price while also knowing which asset classes and products they should be investing in or pitching to clients.
Traders' purpose at an investment bank is to create markets for buyers and sellers and advise clients on financial positions. They are often referred to as market makers due to their ability to quote prices and create a market where buyers and sellers are simultaneously trading products. A trader represents institutional investors when buying and selling securities and often trades with traders from other firms, depending on the volume of stock at the time. Both salespeople and traders work together, negotiating prices and assets to create the best portfolio positioning for their potential clients to do business with.
Landing a job in S&T means that you are required to have very strong interpersonal skills. It also requires being able to interact well with your clients so that they trust what you are advising them on. However, do not believe that simply having strong social skills is enough to succeed in this field; your clients will expect that already. Instead, you should also focus on having expertise in the services you’re selling and the technical knowledge to back them up. Therefore, having a mixture of interpersonal, quantitative, and analytical skills can determine whether you will succeed in this role or not.