Sales and Trading Salary Guide

What Is Sales and Trading (S&T)?

Sales and Trading (S&T) is a department inside an investment bank that includes salespeople who phone institutional investors with ideas and possibilities and traders who execute orders and advise customers on entering and exiting financial positions.

In investment banking, sales and trading activities are two key positions. The phrase describes various actions related to purchasing and selling securities and financial instruments. An investment bank carries out these kinds of operations on behalf of its clients. 

Salespeople and traders are responsible for carrying out the task, with salespeople calling institutional investors to discuss various investment opportunities. When to enter and leave financial positions, traders give their clients advice and carry out those orders on their behalf. 

When it comes to a trader's pay, it is determined by how much profit they have generated from buying and selling instruments. Therefore, it would be extremely tough for the investment banking firm to attract and keep clients and make a healthy return if it can not trade effectively.

You have probably heard a lot about sales and trading but do not know what it is and the salary it offers.

Salaries and Careers in Sales and Trading

Financial firms have great earning possibilities for jobs in sales and trading. But precisely because of this, there is intense competition for employment, and success calls for outstanding talent and extra effort. 

Working long hours beyond the regular market trading hours is usually required when starting in either profession category. Meeting potential investors may sometimes necessitate a lot of after-hours labor because they are frequently preoccupied with their careers during the day.

Sales and trade analysts in major US banks typically earn between $95,000 and $150,000 per year. As per glassdoor.

Sales and trading are essential to any financial securities organization, whether a stock brokerage, hedge fund, or investment bank.

If the firm cannot properly market its services to clients, it cannot do business - and if the firm cannot trade well, it finds it difficult to recruit and retain clients and make money. So it is important to have highly competitive workers for the firm.

Sales and trading analyst salaries are very comparable to investment bankers. Expect an additional variable component of roughly 50%–100%, along with a fixed component of USD 85,000–USD 100,000.

At the associate level, you receive a nice raise and can anticipate compensation of between USD 200,000 and USD 400,000. But everything will depend upon your performance beyond this S&T compensation, job security, and revenue generation.

Sales and Trading Job Description

Typically, a career in sales and trading begins as an intern, analyst, associate, vice president, and Managing director.

The sales and trading job description is provided below:

1. Intern

• Assist in conducting market research and opportunities for clients.
• Construct a financial model and report.
• Get a customer presentation ready.
• Aid trading or sales teams with regular tasks on the trading floor.

2. Analyst

• Constantly be available to clients for pitching and updating market conditions.
• Conduct research to offer perceptions on trading securities.
• Create payrolls, commentary, and notable trades.
• Support senior traders in executing trades and managing risk.
• Help at the trading desk.
• Assist in developing trade strategies and providing market updates to clients.

3. Associate

• Develop connections with medium-sized clients.
• Support the sales team's everyday operations.
• Ensure that trade booking is accurate.
• Keep up relationships with clients by assisting them with transaction execution.
• Carry out financial instrument market making (stock, bonds, etc.).
• Update internal and external clients on market developments.

4. Vice president and Managing director

• Cultivate ties with influential clients.
• Relationship manager position for more significant clients
• Develop a sales plan.
• Oversee trading activities and manage relationships with clients.
• Maintain a trade journal (generally larger and more profitable than a VP).
• Manage significant transactions.
• Develop a trading and risk management plan.

Essential Skills in Sales and Trading

You should have certain skills and qualities to be in Sales and trading (S&T). 

Since it is a highly promising job, some of the qualities and skills that you should have are:

• Rapid decision-making is necessary for the fast-paced environment of the S&T industry. Given the volume of transactions, a minor delay could represent the difference between a highly profitable trade and a disastrous day.
• Extreme multitasking - You'll have your fingers in many pots and have to combine the demands of clients with good internal team communication.
• Product knowledge - You must have a solid understanding of your product class and all related concepts to it to act quickly and wisely.
• Risk management is becoming more and more crucial because even one mistake can reverse years' progress. To maximize your income, you must learn to manage risks and adhere to very strict standards regarding what you are permitted to do.
• Relationship management - helps to connect potential customers to the business. Relationship managers do this by gathering and analyzing customer data to identify trends and problems that may help to enhance client communications. 

Your success as a sales manager will depend on your capacity to relate to consumers, understand their wants, and sell them goods they are likely to purchase.

Career Path and Progression in Sales and Trading 

The hierarchy for a career in investment banking appears to be the same as for a career in sales and trading.

These hierarchies are:

• Intern or summer intern: As a fresher, an internship will be your entry point into a lucrative financial career.
• Analyst: Trading analysts perform trades, monitor, and analyze trade activity on behalf of clients, and study stock market activity.
• Associate: Analysts are promoted to Sales & Trading Associates. They will cover medium-sized clients as of now. Facilitating client flows a trader who supports a more experienced trader who owns the trading book's P&L
• Vice president and senior vice president: Take care of larger clients or a portfolio and Relationship manager for more substantial clients with a junior in charge of execution. Oversees a trading book, typically a bigger and more successful firm than a VP. 
• Managing director: The top position in the hierarchy. They will be the relationship manager for the biggest clients. Manage a Sales Team and trading desk and regulate positions and risk limits.

Most corporate and investment banking roles share a career path with sales. As you advance up the ladder, you begin to lead and manage groups of other salespeople. Senior salespeople just sell more and work with more significant clients, which is also true on the sales side.

In senior roles, you will spend less time engaged in routine transactions and similar activities and more time managing relationships, just like in investment banking.

But when it comes to trading, trading has a somewhat unusual natural career progression. Moving up does not require you to stop trading and only oversee other traders, unlike other banking positions. 

You continue to execute trades to make as much money as possible. What changes is how much money you have to work with and how big your client is.

Sales and Trading or Investment Banking?

Investment banking focuses on significant, corporate-level transactions like the purchase or sale of an entire company, corporate restructuring, or assisting a company in raising debt or stock to finance a significant growth or acquisition.

The bankers invest a lot of time in their research and preparation of presentation materials for the companies they cover. In addition, they act as the bank's sales team for its capital-raising and securities-issuing.

 The bankers:

• Visit businesses that might be looking to raise money.
• Provide banking advice on how to raise money (issue stock, issue bonds, do some complicated transactions, etc.).
• Suggest that the business merge with another business or sell a portion of its own.
• Motivate the business to carry out the plan by using their bank.

The Sales and Trading section comprises salespeople who target large investors and asset managers to persuade them to purchase goods.

The traders execute the deals by creating markets for clients and securing the best pricing, while the salespeople cultivate relationships with these clients and encourage trades. 

Additionally, market makers are traders. Instead of liquidly traded stocks, this would apply to derivatives or fixed-income instruments. 

The traders create secondary markets for the securities that the bankers (see previously) issue, thereby supplying liquidity. The power to allocate bank capital for the primary issuance typically rests with the traders.

The traders then:

• The price is decided when the bank purchases a client's recently-issued bond.
• Act as market makers for those bonds and other bonds in the industry to give the bond buyers access to liquidity.
• The bid/ask spread is intended to bring in money for the traders (buying at the bid and selling at the ask). Usually, their compensation is determined by that profit.

The salesperson:

• Is in constant touch with a few investors they are assigned to cover.
• Is always trying to sell them whatever the traders have in their inventory.
• It goes to the traders to get them to bid on whatever securities their customers have and might want to sell.

The trader typically assigns the salesperson a credit for each transaction they complete as part of the salesperson's compensation.

Exit Opportunities of Sales And Trading 

Your options for exiting sales and trading are more limited than those for exiting investment banking: You can continue trading or change industries, and exit opportunities for Sales and Trading professionals vary depending on their experience, skill set, and career goals.

Since the skill sets do not connect much, moving from trading to private equity or corporate development is challenging. But here are a few options to change your career to another field.

Hedge funds and Asset management are the two best options when you exit from sales and trading because they know the product and its nuances of the particular product. 

There is more location flexibility for hedge funds and asset management, and it is generally a less stressful work environment than sales and trading.

You should decide where you want to be within the first year or two of entering the field since the longer you stay, the more difficult it is to leave. 

But when it comes to sales, selling products and stocks are distinct from one another, but overall sales are sales, and it's more transferrable to other industries. 

On the sales side, you could shift to a typical company and work there more simply because of the broader skill sets you gain from sales and trading since it is less complex than trading.

Considering Sales and Trading?

There's no such thing as "stability" in the finance industry, but it's fair to say that sales & trading jobs are less stable than investment banking jobs. On the other hand, sales and trading careers are demanding and highly competitive jobs that you can have.

This is because S&T pays more than a normal job, it is entirely performance-based, and it's quite simple to gauge your performance: Was the trade initiated by the client? What was the bid-ask spread? How did your P&L look?

Although there are fewer choices available than in investment banking after working in sales and trading, this job is still attractive because it pays quite well compared to other jobs. 

If you are passionately committed to trading and know how to trade and sell, this question is for you. Why not explore sales and trading if you believe you are suitable? S&T might make more sense.

Our Foundations Package and Elite Modeling Package course will equip you with all the hard skills you need at work. 

Researched and authored by Najam Ahmed | LinkedIn

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