I've been doing a lot of research online and on the boards, but I can't seem to figure out the difference between S&T and working in the Capital Markets department of a firm. I know you work on trading desks for both.Can someone please explain the difference?
Capital Markets Group
Please see below for a description of the function of a capital markets groups from Investopedia.
A division within a larger company that uses its expertise in financial markets to provide financial services to specific types of clients. Capital markets groups can help companies meet a wide variety of financial goals such as raising equity of issuing debt. A capital markets group may provide investment management services, lending services, equity sales and trading, research, consulting services or any number of other types of financial services.
Capital markets groups raise capital for clients in primarily two ways, debt and equity. The following is an example of the type of work a junior equity capital markets banker might do.
You keep track of all equity deals (both IPOs and follow-on offerings) globally, and you compile this info for the bankers to use in their pitchbooks. Oftentimes, you are also responsible for putting together league tables (ranking the banks and essentially trying to find ways to make your bank look like it's #1).
ECM also acts as a conduit for pricing the issue (i.e. they decide in collaboration with the bankers, clients and equity sales what the price range will be which gets put in the prospectus, and then when the deal is ready to go, what the actual price per share will be - which ultimately is a compromise between what the salespeople think they can sell it for, and what the client wants).
ECM also helps put together the term sheet for the deal (price range, number of shares, greenshoe option, etc.).
Sales and Trading
Sales: Pitch the firm's ideas to clients to sell securities and build relationships with clients.
Trading: Trade securities, typically in two ways (there are other means of trading, see "Different Kinds of Trading" for more on that): trading for the client or trading with the firm's capital (called agency trading and prop trading, respectively).
- Sales and Trading - A Complete Guide
- Investment Banking vs. Capital Markets - How Different are they?
- Sales - debunking 8 Myths (from a veteran)
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