Will someone help give me some insight on what exactly traders at true buy side firms do?
I currently work on the banking/capital markets side, and I really don't have a lot of exposure to the secondary market. Here's my general understanding.
Big investment banks (sell side) have traders to sell primary offers for the bankers. They also trade on behalf of clients. Traders also perform buy side (or atleast used to), with their own PnL and capital requirement; prop desks.
This is where things get fuzzy for me. What do traders do at firms like Fidelity and Wellington? Analysts generate research and Portfolio Managers make the calls on asset allocation and actual investment picks.
Are the traders at these buy side firms there just to execute the wishes of the PM? Are they their just to make sure that the fund's moves are descrete and that the trade is liquid? Do they have their own PnL and capital to trade?
What is comp like for sell side vs buy side trader? I know that sell side traders will court the buy side so that trades come their way. How does that work for in house buy side traders?
bump
Buy side traders are generally a write off unless you work for a hedge fund. from my personal experience, sales traders is where its at. Trading as a profession though doesn't provide many exit opportunities so if your shit... you better have a back up plan to fall back on. But if your good, the skys the limit. Consider dual sales and trading positions.
Anyway, sales trading in my opinion is where its at. buyside traders just monitor portfolio positions and take orders from the PMs. In essence there block traders that just press buttons and take orders from someone above them
You don't know what the fuck you are talking about. Do a search.
What makes hedge fund traders different from the other buyside traders? I would assume that hedge funds need these execution traders that take orders from PM's too?
I'm interested in hearing your analysis of the question pal, maybe i;m a little wrong on the buyside part but i know for a fact that good sell-side traders make ridiculous coin
Buyside Trading (Originally Posted: 10/09/2008)
What's buyside trading like? Either at multistrat HFs or MFs
a lot better than the sell side is - more idea generation and less bullshit.
Don't PMs and sales people come up with the ideas?
at fundamental HFs, analyst drive the ideas and traders execute
and how about mutual funds?
There wont be a buyside by the end of the year. So much for those funny mentals.
What do you do in Buy Side Trading? (Originally Posted: 05/13/2011)
I'm gonna be interning with a large Mutual Fund company this summer as a trading assistant. My goal was to get into sell side S&T but I didn't receive any offers so I was wondering, how is buy side trading different from sell side trading? And is the salary for full time different between the two? Also, will doing an internship in buy side trading help me at all for FT S&T recruiting?? Thanks for helping me out!
Good questions that I'd like to know as well.
Buy side is more like prop trading, I believe. Sell side is more like market making/flow/execution trading.
First of all, awesome handle TedMosby.
Buy side tading at a mutual is not like prop trading. The investment professionals make the investment decisions and your job is to execute the trade with the lowest cost possible. Not so easy in this HFT world we are in.
You will be working with sell side traders to execute the trades, so make friends and network this summer.
Here's to your summer being legen ... wait for it ... dary!
haha yeah I love that show.
Does anybody know how much buy side junior traders make? Is it the same as sell side traders or less?
Buy Side trading (Originally Posted: 06/19/2010)
Hi does anyone know what do buy sell traders do? My understanding is that they execute trades as required by PMs. If that's the case then it sounds like quite a mundane job.
Is it possible to make an impact on the performance of the fund through a trader's ingenuity?
How do their compensation compare with sale side traders?
Thanks for any help.
Davo
I think a lot of it depends on the fund and role. You might enjoy the book Inside the House of Money, it's about global macro fund traders. I think there probably are some that simply do execution, but I'm pretty sure they have traders who get some portfolio capital to trade on their own.
sorry i should have been more specific. I wasn't referring to hedgefund traders, but rather traders that execute investment strategies for fund managers (whether equity, fixed income etc). I went through the Vault's guide to S+T but they only cover the sale side traders. Are the jobs of buy side traders too boring to be discussed on this forum? lol.
Double post
Ah sorry, I just noticed this was in asset management. In that case I would guess its mainly execution, but I couldn't say.
You are referring to sales-trading. This is the sell side though, not the buy side as your title indicates. One's clients are on the buy side. I spent 3.5 years as a sales-trader, primarily focused on risk-arb. Feel free to PM with any specific questions.
Buyside traders are basically salestraders for PMs. Meaning they execute trades for PMs. so yes you are right its a mundane job but the hours are very good. I think they do something like 7-4:30 while the sell side (salestrader) will work 6:30-6:00. At some mutual funds like Fidelity it's a stupid job but if you can get into a riskier fund/hedge fund you can make a bigger impact, won';t just be taking orders.
Hi Kar87. Thanks for your reply. If buyside traders are purely executionary, what do they do when they are not executing orders from PMs? I guess a fund like Fidelity cannot be making adjustments to their portfolio all day long. Thanks for your insight.
Davo.
That is what they spend most of their day doing (working on trades) sometimes they are big trades so they go slow. fidelity is slow. im no sure what else they do, maybe go drink with the sellside.
that's why they get off at 4:01 haha!
Some of them also get their own trading book separate from the execution orders of the PM (depends on the firm)....so it's not all mundane and purely executional....they handle the relationships with sales coverage, negotiate the offers, transact, monitor price levels/yields etc. Also, for the # of hours they put in, it's a pretty good compensation package.
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