Buy Side Traders

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?

 

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

 
Best Response
wallstreetballa:
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.

"Greed, in all of its forms; greed for life, for money, for love, for knowledge has marked the upward surge of mankind. And greed, you mark my words, will not only save Teldar Paper, but that other malfunctioning corporation called the USA."
 

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!

 

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.

 

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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