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A Career in Sales and Trading

Sales and trading professionals are involved in investment banking activities on behalf of institutional investors, whether they be corporate firms, governments, or other organizations. A career in sales and trading is demanding and a highly competitive one. It requires not only specialized investment industry knowledge, but also a talent for working in a fast-paced environment. Professionals interested in this financial career path must be self-motivated, have deep knowledge of the investment industry, and have excellent persuasive skills.  
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What Do Sales & Trading Teams Do?

Sales and trading departments oversee buying and selling of financial products to provide liquidity to their investors. The most common type of security traded in these markets is called "equity," which means shares of ownership in companies. Equity shares may come from publicly traded companies, small start-ups, or large multinational corporations. Other types of securities include debt instruments such as corporate bonds, government bonds, mortgage-backed securities, and derivatives. Derivatives are contracts between two parties where one party agrees to pay another if something happens.

Sales vs. Trading

Salespeople and traders simultaneously work to obtain clients, pitch business opportunities, and execute buying and sales for institutional clients. This division within a firm typically employs specialists who focus on specific markets, asset classes, and regions. 

Sales Role

Salespeople market products to clients and persuade clients to place trades within the salesperson’s bank or investment firm. The salesperson conducts research to build a portfolio to pitch to clients that will be attractive to their business model. This group stays up to date with investment news and current market conditions, quarterly earnings reports. They also maintain communication with traders, equity research departments, and portfolio managers for insights to ensure that they understand which investments will be enticing for their trade client. In addition, a skilled sales group individual at large investment banks is essential to selling the number of stocks to clients to maximize capital for an initial public offering (IPO).

Trading Role & Trading Markets

Traders aim to create markets for buyers and sellers and advise clients on financial positions. A trader represents institutional investors when buying and selling securities and often trades with traders from other firms depending on the volume of stock at the time. Both salespeople and traders work together, negotiating prices and assets to create the best portfolio positioning for their potential clients to do business.

Sales and Trading groups in financial markets offer long-term equity capital for investors in public markets such as venture capital funds, mutual funds, exchange-traded funds (ETFs), and other banks at a low price. These firms do not underwrite IPOs but must ensure that their salespeople can successfully market their financial products for different financial markets to make their organization profitable. Mutual funds and ETFs make their profit through fees in the secondary market. The more clients, the more fees are pulling in profit, and the more success a firm has with nurturing their relationships and maintaining placement in this competitive environment. These funds are big public institutional investors, whereas individual investors such as hedge fund managers, pension funds, and stockbrokers are private investors in the primary market. 

Typical Trading Salary

According to a 2019 CFA Institute compensation study of charter holders and members, those in trading roles reported a typical, global total compensation of US$165,000 (US$108,000 base salary).

Types of Trading

Trading teams focus on specific complex products, asset classes, and regions to create investment strategies for their trade client and works as an advisory service. These products range from cash equities and equity derivatives to fixed income such as bonds and currencies (foreign currency exchange). Trading professionals specialize in certain trading services because these market makers need to be experts in their niche. The three main types of trades are the following:

  • Propriety Traders

    • Sometimes abbreviated as “prop trading” 
    • Focus on a hedge fund approach 
    • Maximize the proprietary firm’s (e.g., an investment bank’s) profit via investments in financial instruments rather than via service fees

  • Agency Traders

    • Invest on behalf of their clients on an exchange such as NASDAQ or NYSE
    • Make smaller profits because firms in this trade take no risk 
    • Do not have free range on the market like prop traders do 

  • Flow Traders

    • Make principal transactions such as stocks, bonds, and other financial instrument trades for their clients 
    • The term “flow” refers to the flow of client funds through the transaction rather than the trading firm’s own funds 
    • Cross between proprietary trading and agency trading

Other Sales & Trading Career Paths

Along with salespeople who manage portfolio building and client relationships, and traders who serve as trade executors and advisors, additional notable positions within the division also support sales and trading groups.

  1. Structurers: Structurers aid salespeople when the portfolio that they are building is operating around complex products. Salespeople may lack the knowledge needed to successfully market to clients, so structurers research within their area of expertise and design products to pitch to clients on behalf of salespeople.
  2. Researchers: Researchers provide insights and trading ideas to salespeople, traders, and their clients. Most commonly researchers perform equity research and credit research. Equity research focuses on public companies to help build investment recommendations for buying, selling, and holding. Credit research focuses on fixed income research which is debt-related information such as bonds.

How to Get Started in a Career in Sales & Trading

To be a successful salesperson or trader for a financial firm, you must have the confidence, drive, and persistence to thrive in a highly competitive market environment. Salespeople must have thorough knowledge of the financial products they are selling to influence external clients into investing and must also be tremendously personable to win over their client and maintain relationships for future sales. Traders need to be analytical, have excellent mathematical skills, and be willing to work a wide variety of trading hours. To succeed in a trading career path must be able to retain information quickly, analyze deals, and execute trades according to plan.

Most sales and trading positions require a bachelor’s degree in finance or a related field such as economics. Starting a career in sales and trading may be difficult since there is high income potential attached to this career path. Once you have decided what position within a sales and trading group you are interested in, securing an internship during your undergraduate career or after is a great way to enter this job market. Many firms may prefer to hire new analysts within their intern class.

The promotional side of sales and trading has structured internal opportunities. After entering into a firm as an intern or analyst, you may have the opportunity to move up the sales and trading hierarchy to associate, vice president, executive manager, and even managing director. 

Jobs Similar to Sales and Trading

Explore other financial roles focused on institutional support beyond sales and trading:

How Can the CFA Program Help Me?

Investment professionals looking for sales and trading roles need to demonstrate mastery of in-depth investment knowledge, which is exactly what the CFA® Program curriculum is designed to provide.

 

Explore whether CFA Program is the right choice for your next career steps

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