What is Sales and Trading?
Sales and Trading is one of the main business segments in investment banking, in addition to Mergers & Acquisitions (M&A), Debt, Equity Underwriting, Equity Research, and Brokerage – which connects investors with speculators, buyers with sellers. This function includes the buying and selling of financial products to provide liquidity to institutional investors such as corporations, governments, or other organizations. Instruments include stocks, bonds, and derivatives.
Sales and trading roles are among the most dynamic, exciting, challenging, and rewarding positions, and are also the lifeblood of an investment bank. If the firm can’t successfully sell its products to clients, then it is unable to do business – and if it can’t trade efficiently, then it becomes difficult for the firm to find and keep clients and to make money.
Key Learning Points
- Sales and trading are two different roles. It is important to know the differences and which role suits you better.
- The main paths to sales and trading jobs include converting internships to full-time roles or breaking into sales and trading after further education, work experience, or internal transfer within the bank.
- Top schools and previous internships or experiences in related industries are essential to entering sales and trading.
- Investment banks do not only select candidates with financial backgrounds, but offer opportunities to those who have studied other subjects such as economics and government/public policy, math, science, or engineering.
- Most firms prefer to hire experienced sales and trading professionals. If you’re new to the field, it’s important to get one or more internships in the sales and trading industry prior to applying for your first full-time job.
Differences Between Sales and Trading
Sales and trading are two very different roles. Salespeople are responsible for building relationships with potential clients to sell or buy stocks, bonds, and derivatives, while traders help clients execute transactions and try to maximize profits.
In general, sales positions in investment banks are more strategic than trading positions. Investment sales are one of the primary activities in sales and trading. Salespeople at investment firms stay up to date with investment news and current market conditions, communicate information about securities to investors, leverage the firm’s investment research, and pitch securities to clients. Moreover, they maintain communication with traders and equity research to understand the securities that will be attractive to particular clients.
Trading jobs are more focused and intense. Traders make a market and execute trades on behalf of investors. Like sales, traders focus on specific products. Additionally, traders need to be quick with mental mathematics, have the quantitative skills to understand complex products, intuitively understand markets, and be able to spot mispricing.
Strategies for Breaking into Sales and Trading
- Convert a sales and trading internship to a full-time job opportunity. At most investment banks, most new hire sales and trading professionals come from the intern class.
- Break into sales and trading after completing a master’s or Ph.D. While internships are the most common route into sales and trading, a quantitative master’s degree is an option for positions that require a lot of mathematical and analytical skills.
- Internal transfer: Existing employees know the people, products, and systems already and can quickly be trained to fill the sales and trading roles.
Sales and Trading Recruitment
At a high level, the recruiting process for entry-level sales and trading candidates is like investment banking. Steps typically include:
- Networking via alumni, LinkedIn, or email requests for informational interviews, follow up, do quick 10 or 15-minute calls, thank them, and stay in touch over the next 6-12 months.
- Research and target potential companies. Although many students have a good understanding of their target regional market, they still need to understand the functional aspects of investment banking or sales and trading job opportunities and how responsibilities vary from region to region.
- Complete an online application including screening questions.
- Complete a phone-based or in-person interview. Interview preparation for sales and trading jobs differs from other positions like investment banking. It is more qualitative, and candidates need to have soft skills such as the ability to speak with clients rather than just theoretical knowledge. To demonstrate these personality traits, it is important to be able to talk about personal investments, past experiences, and specific market topics.
- Practice your interview technique with the 5 common behavioral and technical interview questions attached.
Who Gets Sales and Trading Jobs and How to Prepare Sales & Trading Resumes?
To have a realistic shot at landing a job in sales and trading, you’ll need to point to a sequence of previous undergraduate sales and trading Internships. Then, you need to present that experience effectively on your resume. In sales and trading, employers want to see strong evidence of a passion for the financial markets. Your resume should reflect this.
Most S&T interns can be described as follows:
- Top schools, such as the Ivy League in the US as well as Oxbridge in the UK and Imperial in Europe. If you didn’t attend a “target school”, it is possible to network your way into sales and trading, but this is more difficult and you need to start earlier.
- Previous internships in related areas such as asset management, private equity, hedge funds, or private wealth management. If you don’t have internship experience elsewhere in the finance industry, your chances of winning a sales and trading internship at a large bank are slim.
- Non-finance majors are common, so you’ll see a variety of technical positions ranging from economics and government/public policy majors to math, science, and engineering majors.
How to get into the Sales and Trading Industry
Starting a career in sales and trading may be a challenge since there is high-income potential attached to this career path. Most sales and trading positions require a bachelor’s degree in finance or a related field such as economics. To be a successful salesperson or trader, one must have the confidence, drive, and persistence to thrive in a highly competitive market environment.
Education and training
There are no formal education or training requirements for professionals in the sales and trading industry. However, many people who wish to enter the field pursue a bachelor’s degree in a finance-related discipline, such as mathematics, economics, or accounting. Professionals working specifically in sales often choose to earn a Master of Business Administration (MBA) or an advanced degree in a related discipline.
Most trading and financial firms prefer to hire experienced sales and trading professionals. If you’re new to the field, it’s important to get one or more internships in the sales and trading industry prior to applying for your first full-time job. Sales and finance internships can provide you with valuable hands-on experience. They also may demonstrate to potential employers that you have sufficient skills and knowledge to meet the requirements for their full-time positions.
Traders and some sales representatives require licenses, although these vary by firm and specialization.
A career in sales and trading is demanding and highly competitive. It requires not only specialized investment industry knowledge but also a talent for working in a fast-paced environment. Professionals interested in this career path must be self-motivated, have deep knowledge of the investment industry, and have excellent persuasive skills.
Skills for Sales and Trading
Salespeople must have thorough knowledge of the financial products they are selling to influence clients. They must also be tremendously personable to win over the client and maintain relationships for future sales. Traders need to be analytical, have excellent mathematical skills, and be able to retain information quickly, analyze deals, and execute trades according to plan.
Investment banking recruiters will seek specific personality traits such as the ability to handle rejection before hiring a person as a junior trader. Some skills that sales or trading professionals can benefit from developing include:
Financial analysis: Sales and trading professionals should know how to collect, evaluate, and interpret financial data. They can use this financial data to make investment or trading decisions that minimize risks, optimize profits, and take into consideration current market factors or trends.
Product expertise: To make quick and correct decisions, sales and trading professionals really need to understand the product class and all its related concepts.
Decision-making: Sales and trading is an extremely fast-paced work environment where high-value decisions must be made very quickly. A sales or trading professional can efficiently analyze financial information and use it to make effective decisions. These decisions may be in relation to tasks such as executing trades or minimizing financial risks.
Relationship management: Success as a trader or sales manager will depend on the ability to communicate with clients, understand their needs, and pitch them products that they are likely to want. Moreover, they must be persuasive and make clients feel comfortable with their recommendations.
Risk management: Risk management is becoming increasingly important as even a single mistake can wipe out gains made over several years. There are very strict standards in terms of what you can do, and you must learn to manage risks to maximize your revenue.
What is the Future of Sales and Trading?
- Sales and trading offers a lucrative career path, with ample and structured opportunities for internal promotion opportunities.
- Securities, commodities, and financial services sales and traders usually advance to senior positions by accumulating a greater number of accounts.
- However, there are not many changes in the actual work when you move to a higher position. In every position, you always have to trade. Only when moving to the managerial side will you stop trading.
Sales and trading incorporates the professionals who are responsible for pitching buy and sell recommendations in stocks, bonds, and derivatives to institutional investors, executing trade orders, and advising clients on entering and exiting financial positions.
Sales and trading jobs working with products like fixed income, equities or derivatives are very well paid, but they are very results-oriented job where good or bad performance is immediately obvious, and job security can be limited.
Entry to the best trading desks is super competitive; investment banks tend to hire a lot of juniors and promote the ones who perform best.
If you are looking to start a career in sales and trading, enroll on our sales & trading course. Learn the markets and products for both equities and fixed income, currencies, commodities and the relevant derivatives, and earn a Wall Street recognized certificate.