People in Sales, do you think trading is overglorified?

Trading sounds cooler, but I bet most of them can't beat the S&P 500

Big difference between doing S&T and prop trading... the former is more sales, the latter is pure trading where you make a living by extracting $ from the markets.

As a trader you have responsibility for PnL. Your fate ($ wise) is more in your hands, so to speak.

Not all traders "make big bucks" and "move on to a hedge fund" after a few years.

Most kids at these info sessions have absolutely no idea what trading at a bank is actually like. it is decidedly not "I like aapl, let's buy 10k shares". I've seen this over and over through the years.

And as for trading depending on sales...not all customers are created equal, and there are some most trading desks would be absolutely ecstatic to never deal with.

Honestly its probably because most nerdy target school undergrads aren't confident in their ability to be a good salesman. Its a damn hard profession to be good at as you need the smarts to understand the securities your clients are trading and the social skills to win their favor.

Sales is a people skill. Trading is a technical skill.

Traders are closer to the money than sales - not sure why they would be labelled as "overglorified". This debate could go forever - I've worked on equity floors where sales and traders would hurl ICBM's at each other.

"Its a damn hard profession to be good at as you need the smarts to understand the securities your clients are trading"

ha, no they don't

This actually a great thread for me. I am more interested in corporate finance oriented roles, but you guys mentioned that trading isn't like investing.

So what do the traders actually do then? Do you mean that they just hold their respective group's securities for a short period of time, so its not traditional "investing"?

Any feedback would be appreciated.

Question for the S&T monkeys, do you see the need for more sales people or are these slots typically getting filled by the wanna-be traders? How can someone who wants the sales job not get overshadowed by the wanna-be trader who has the better resume?

"The only guys that make a paycheck from actually trading within a bank are prop traders. They essentially run their own hedge funds and their income is derived from extracting $ from the markets."

this isn't really true. market making desks are very much trading desks, but they are not guys taking a punt on some name they like. Market making is all about knowing positioning, relative value, and "outs" for a position you take on, and then hedging it effectively while your hold it or buying at a good enough price on the way you can ride the swings (especially true for structured/exotic products)

Most people in Sales are happy to be in Sales. When you get to the actual trading floor environment, people naturally gravitate more towards one role or the other. The fit comes down to both personality and skillsets. Personality is simple: some people thrive on communication, others on making quick decisions with little input or guidance. The skillset is more nuanced. Most traders are highly numerate, because it's integral to the job. It's necessary in sales (most sales), but salespeople come in more shapes and sizes - some rely more on personality and charisma, some rely on networking, others on gossip, and others on thought leadership and idea generation. The variance in numeracy amongst salespeople is higher than amongst traders.

From the outside it's easier to "get" the idea of being a trader, because people envision themselves as direct participants with the markets rather than as intermediaries (which is where the Sales component starts to have an easily justified existence).

However, with prop trading and principal investing going away, investment banks are increasingly returning to the intermediary model. Hard to imagine agency trading being glorified, so logically, any glorification of such a role is likely to be excessive. In this kind of environment, for purely economic reasons, most Sales people will be content where they are.

Most traders, whether prop or market maker, make money from trading in the sense of proprietary risk - some less so as they have a strong flow franchise and some more so. Spot traders do not make much if anything on the flow they see (even the big guys), however long dated exotic rates products (for example) almost exclusively make their money from flow and have no need to prop trade. That is either end of the spectrum. I get tired of reading people saying market makers don't prop trade.

Anyway, some sales people legitimately bring accounts with them when they move shops, however on average most sales people I meet are relatively clueless about their product (even the senior guys) and have little/no staying attraction with 'their' clients. On the other hand, not every trader makes money which is the job at the end of the day.

Who has the power varies by bank - some banks are sales focused, some banks are trading focused so the balance of power shifts. You can normally tell by the background of the senior management team.