When youth of a certain age emphatically state “I want to be a doctor when I grow up” no further explanation nor reason is really required. The work itself rewarding, the pay generous and the prestige with the position is could clearly be reason enough. You may ask “What kind of doctor?” but so long as the reply is not “Dr. DoLittle” their desired direction is clear. Not so in finance. When it comes to working in finance and the financial industry there are just so many jobs requirement such a wide-variety of skill set from advanced people skills to PhD level mathematics.
This article focuses on the what a Sales Trader does, what skills are required to be a good Sales Trader, and how to get a job as a Sales Trader.
What Does a Sales Trader Do?
In finance, a Sales Trader’s job is to both recommend and execute orders on behalf of clients. This involves calling (sometimes cold calling) and convincing clients to trade various stocks of which the bank or trading firm will earn a commission off the deal. To further illustrate the job of a Sales Trader at a large financial firm some background on their environment is necessary.
Most large financial firms (bulge bracket) have a large list of clients that actively trade in the open market. These firms act as both financial advisors for these clients as well as order executors. In order to serve these clients best, most Sales Traders will be given a specific list of clients to service (perhaps around 20) and it will be their job to continue to update these clients are the latest research produced by the firm, market moves and trading ideas so that the client will continue to execute their trades through the firm and the firm can earn a commission.
A Day in the Life of a Sales Trader
Most Sales Trades will start their day around 6:30am, spending the first half hour of the day reading the Wall Street Journal or another financial paper to keep them up to date on the market. Usually mot firms will have a 7:30am morning meeting to discuss new ideas, stocks to push or other admin business. After that it’s off to the races and with the exception of lunch they are at their desks on the phone or using chat programs for most of the day.
What skills are required to be a Sales Trader?
The two most important criteria for success for a Sales Trader are work ethic and the ability to translate complex research and earnings reports into a digestible manner for clients to understand. Paying particularly close attention to new initiations of coverage, upgrades and downgrades, changes in target price and the justification for these analyst actions. While Research analysts may love talking about EBITDA multiples and evaluating the latest technology in technical jargon that nobody understands, as a Sales Trader you need to translate lengthy analyst commentary into an understandable language for your clients. These institutional clients are often inundated with calls from counterparts at competing firms, and it’s important that you be the first to deliver timely market information and value-added investment research.
Sales Traders themselves can often be categorized based on the financial products they are offering (cash equities, derivatives, corporate bonds) or by regional coverage – Asian markets, North American markets, etc. It’s a Sales Trader job to fully understand their market because they will continually be relied on by their clients as an expert in all market related news and movement for that market or product.
How to get a job as a Sales Trader
While intelligence, work ethic and very strong people skills are absolute requirements for the job, to be successful having a strong network within finance is crucial for success at this role. There are very few junior Sales Traders working in large financial institutions simply because they lack the personal connections to gather more clients through a simply phone call than someone with 20 years experience in finance who happens to have friends working at all the major hedge funds in town. This fact because important because when you’re asked to call up “Major Hedge Fund A”, if you have worked with the CIO (Chief Investment Officer) or perhaps even at one point been a colleague of someone else in the firm you have an instant “in”, or an edge over other finance firms competing for the same business.
Networking in finance, however, is not as bad as it sounds. Because everyone in the field of Sales and Sales Trading understands how important networks and connections are, companies hold many events to try and get to know their clients and potential candidates. But it also means when you’re interviewing at one firm the connections you actually make during the interview may end up being useful at the next interview you go to with a different firm.
Give off the right amount of enthusiasm
In order to be successful in finance as a sales trader (both at work and in the interview) you need to show the right amount of enthusiasm that conveys both maturity for the position and the ability to take rejection (a lot of rejection) in order to get the sale. But again, if you're not sure if this is you then almost by definition it isn't, as the amount of confidence you need to continue pushing through will eat you alive if you can't handle the pressure.