How to rise up the ranks in trading on the sell side
I received a return offer for a BB S&T program and am interested in trading. There are a lot of posts asking about exits, but I'm curious how one becomes a trading MD? From what I have seen, people even alternate between sell-side and buy-side throughout their careers, so I would be interested to know what makes someone good at running a sell-side franchise, particularly in fixed income. I understand it's probably not enough to be an excellent risk-taker to become an MD, so I would like to know what separates someone who can manage a trading business well. Why are some people stuck at VP and Director levels and cannot rise further aside from the availability of seats? How does the skillset evolve with seniority? If that's the case, I may spend a substantial early portion of my career on the sell side and want to be in a senior role managing substantial risk. I ask this because I think personality I'm more suited to this kind of position than purely quant, even tho I come from a STEM background.
Great question! Rising up the ranks in trading, especially on the sell-side, requires a combination of skills, experience, and networking. Here are some insights based on the most helpful WSO content:
Learn on the Job: The process is only learned on the job. You need to gain confidence in the systems and get the trust of the sales team. Make sure you know the people you are interacting with very well. Invest in non-work "face-time". If they know who you are, they will forgive screw-ups (as long as not too many). There is nothing more frustrating than miscommunication between sales and execution traders. Take over as many orders as possible. Take control of the process. Make your mistakes early on. You will be expected to be super slick and confident in a few weeks so you better get used to it.
Networking: As an execution trader, you will be interacting with sell-side traders. Given these interactions, you can start networking and build relationships with them. Then when one day, if you do decide you want to move to the sell-side, you already have connections who can make that transition easier.
Professionalism and Work Ethic: Show that you can be a beast analyst first, then take on more senior level responsibility later. Always have a positive attitude, be the first to the office, always try to respond to emails within 15 minutes, be a team player if you don't have much on your plate and help others, communicate about deadlines, and do not lie or bullshit - if you made an error, admit to it.
Understanding the Industry: Understand the current state and future of S&T. For example, Australia is definitely ‘over-broked’. Too many Investment Banks, too little margin so it’s harder than ever to do business. We will see maybe 5 big Investment Banks providing their trading services and other players in the market to exit as the business dries up over time. That being said the exit opportunities for sell-side traders is quite good.
Remember, the journey to becoming a trading MD is not a sprint, it's a marathon. It requires patience, perseverance, and a lot of hard work. Good luck!
Sources: Q&A: 25 years Sales / Trading Experience, Conversation with an Equities Sales Trader, I made it in... Now how do I get further up the chain?, Sell Side Trading vs Buy Side Execution
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