This area is involved in the buying and selling of financial products (eg stocks and bonds). There tends to be four distinct roles in the sales and trading area.
Sales is the term for the investment bank's sales force, who are most commonly known as brokers or dealers. Their primary job is to call on institutional and high-net-worth investors, pension funds and hedge funds to suggest trading ideas and take orders. Sales desks then communicate their clients' orders to the appropriate trading desks, which can price and execute trades, or structure new products that fit a specific need. They will also work with traders and the research team to devise trading strategies and raise capital for the bank by placing newly issued bonds and shares with investors. Their key challenge is to ‘build their book’ of client transactions. They’ll work the phones for the whole time the markets are open, and often for a few hours either side.
These are the people who actually do the buying and selling on the financial markets. They access the markets through an array of computer monitors each showing movements of stocks, bonds, foreign exchange, commodities and various other financial products. They’ll also have up-to-the minute news and research streamed live to them, so that at any moment they can press a button to buy or sell the product they’re tracking. They need to buy low and sell high, in order to make money.
The research division reviews companies and writes reports about their prospects, often with "buy" or "sell" ratings. While the research division may or may not generate revenue (based on policies at different banks), its resources are used to assist traders in trading, the sales force in suggesting ideas to customers, and investment bankers by covering their clients. The research role varies according to each bank. Researchers will often sit and work directly with sales, presenting their take on how different markets will perform. Typically this covers analysis of a specific company or sector’s financial performance. At a more advanced level, they will also be involved in creating and pricing new financial products for the sales team to sell to clients.
In many banks this is a fairly recent addition to the Sales and Trading division, as derivatives have come into play, but one you may find has a large intake of highly technical and numerate graduates. ‘Structurers’ work with the sales team to understand the needs of clients whose requirements are either very specific or highly complex. They then structure deals so they are tailored perfectly to client requirements, sometimes creating new financial products in the process. Structured products can include a whole variety of different securities including stocks, bonds, commodities, and derivatives – all neatly packaged up for the client. They work on creating complex structured products, which typically offer much greater margins and returns than underlying cash securities.
Within Sales & Trading, there tends to be a specialisation of the above functions by market. These are:
Is it for you?
This area requires very early starts - before the markets open and long hours. It’s a competitive and challenging career and you need to be thick skinned. It’s hectic on the trading floor so you need to be confident, quick to learn, enthusiastic, sociable and assertive. You don't necessarily need a business or economics degree, although savvy in this area is a must. You will need to have excellent mathematics skills and the right attitude.
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