There are a lot of differences between Investment Banking and Sales and Trading (S&T) including:
- Exit Opportunities
Both positions are within the “Investment Banking” umbrella and both will go through a two month training program prior to full-time work. Since we have already covered what Investment Bankers do, let’s go over the roles of Sales and Trading.
On the trading desk it is not uncommon for you to start trading real money day one of work (under a small budget). Some investment banks will have a difference between Junior and Senior Traders while other will not use titles at all.
Types of Traders:
- Proprietary Traders
- Flow Traders
- Agency Traders
Most banks will hire traders to a specific area of trading: Equity, Fixed Income, Derivatives, etc. If you are doing your internship you will have the chance to move around within different areas.
Traders will wake up prior to market open (6-7am), spending the morning strategizing over different markets and how they think those markets will trade that day based on news flow, economic indicators, and other factors that might influence the markets. They will spend the day placing trades and talking with brokers getting market color and information on what’s going on. Post market the traders will spend time wrapping up trades for the day, analyzing positions, and setting up a to-do list for the next day.
This is a very trading oriented role – you should be interested in the markets if you want to get into trading.
The Sales teams provide coverage to clients such as Hedge Funds, Mutual Funds, and other institutional firms. Being on a sales team you will be assigned certain clients where you will provide them products available at your bank: Equity Research, Company Meetings, and access to capital market transactions.
A large part of your time will be calling clients and trying to give me information about the markets and also provide recommendations given by the equity research team. Let’s say a sales team called a Hedge Fund and recommended buying Yahoo! stock, if the Hedge Fund liked the idea they would generally place the trade through the bank generating trading commissions.
This is a very client oriented role – you will be spending a lot of your time making your clients happy. You need a good knowledge of the market plus social skills to interact with existing and potential clients.