Sales or sales trading?

Hey guys, I know there has been a bit written about this in the past but there is nothing that fulfills what I'm looking for...
I was just wondering about the differences between a normal sales (say equity sales) person and a sales-trader... Are there big differences in terms of exit opportunities, salaries.. etc... ???

Basically, I am just about to start a summer internship at a BB in sales - I will be doing two rotations - one on an equity sales desk, and one as more of a sales-trader for listed derivatives (to hedge funds, etc).

Would I be right in thinking that a sales person would generally take home better compensation and have better exit opportunities??? Do sales-traders just take order? Or do they actually provide ideas, and try and sell??

Any expertise at all on the whole sales or sales-trader, or anyone's preferences, would be a great help...

 

Equity sales - I really would call this research sales as the position is mostly just selling the firms research to institutions.

Salestrading - You are covering accounts by sending research ideas information and taking the orders. Depending on the firm they will also be the ones working the order but its almost always going to be agency or riskless principal. This requires you to have a relationship with the traders/pms you are covering as you dont have a real product you are selling rather you are selling coverage/information/execution.

Equity sales guys are going to understand the research products they are selling a lot better than a salestrader. A salestrader is going to understand whats going on in the market a lot better. At a BB i imagine the pay is about the same. The salestrader model has mostly shifted towards the inter dealer brokers (GFI ICAP TULLET BTIG) as they offer a MUCH better compensation model than the BBs do. Basically the banks believe its their client and the salestrader is just doing the coverage. This is why you see salestraders leave the banks and join the inter dealers. Its not really a salestraders job to pitch ideas but rather present the facts that are present. Remember the buyside guys have their analysts plus other places research.

As an intern I think its good to get experience in both. Happy to answer any more questions you have.

"Oh the ladies ever tell you that you look like a fucking optical illusion" - Frank Slaughtery 25th Hour.
 
Best Response

How it works at my bank:

Equity sales: Sell the research recommendations to the portfolio managers and analysts that are 'clients' of their banks equities desk - typically have a relationship going way back. Junior sales people typically start off in research, get their name known in the industry and go from there. However, there are plenty of exceptions. The strength of your desks cash equities business will determine if they're willing to take a junior as the junior will eventually assume clients from the older members and network with younger analysts on the buy side to win more business down the track.

Sales trader: Receive the order from a fund and log it into the order pad. The fund will either have a broker-dealer phone in/talk on Bloomberg chat or a PM/analyst will do it - depends on the size of the fund. The sales traders pitch the research to the dealers as some have a small discretionary account, and/or anyone who they have a relationship with who could be an analyst or even PM, but it's typically the Sales team that does this.

Once an order is logged, the sales trader will work the order in the market according to client orders (guaranteed price/beat daily VWAP/execute at 25% of daily volume) or an operator will do this - I don't know how it works in the US but not many Sales Traders here have their operators license so they can't directly input the order themselves, the operators will do it.

The role of a sales trader/operator leaves little discretion most of the time as to how you execute the order, however some banks let their STs/operators have prop books - either to only take the other side of a client order or to take pure prop positions. $0 brokerage = ez game.

That's just a bare touch, and this is a non-US operation although I know in Asia it's similar if not the same.

In terms of ease, I would say sales trading beats sales and you can move into actual vanilla equities or derivatives trading down the line. Sales can be more lucrative than all of them (with perhaps the exception of derivatives trading) however that's after many years and assuming you can build a good client base.

Good luck.

 

Well said. The firms I have worked with the salestraders all have their series 55 so they are the ones putting the orders into the machine. Typically they have little to no discretion in how they do the execution they are following client instructions much different from a trader/dealer that trades out of inventory/makes markets.

"Oh the ladies ever tell you that you look like a fucking optical illusion" - Frank Slaughtery 25th Hour.
 

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