Sales

1
Sales Trading

• Ever wonder why fund managers can't beat the SP
  500? 'Cause they're sheep, and sheep get
  slaughtered.
• -Gordon Gekko, Wall Street

2
What is Sales and Trading?

• Term that defines the symbiotic relationship
  between institutional salespeople and traders
• Salespeople provide the clients for traders
• Traders provide the products for sales
• Traders are buying stocks or bonds for clients,
  and these clients filter in through sales

3
Importance in Investment Bank

• Where the rubber meets the road in the investment
  banking industry
• Sales department sells securities in companies
  the bank underwrites
• Broker or sales representative writes the ticket
  for an investor order
• The trader then makes the trade
• Add incrementally to bottom line through profits,
  losses, and commissions
• Raise the profile of firm in marketplace

4
Sales

• Works to build accounts, or clients
• These clients are buy-side investors
• Sales people constantly interface with clients
• They are responsible for relaying to the trader
  the clients interests and desired positions
• Goal is to match the client with the product or
  service that best fits their needs
• The total return on the trade often determines
  the money a salesperson makes

5
Trading

• Responsible for taking a position in a security
  issue and buying or selling large amounts of
  stocks or bonds
• Traders make money by buying low and selling high
  (the difference is the spread)
• In a sell trade, this means selling at the
  highest possible price
• In a buy trade, this means buying at the lowest
  possible price
• Traders also spend time entertaining clients,
  often with sales team

6
Personalities

• Salespeople
• Excellent communication skills
• Outgoing personalities and smooth
• Bullshit artists

• Traders
• Mentally sharp
• High stress tolerance
• Quantitative
• Quick and tough

Market enthusiasm
7
Working a Trade

• Adjust positions and grind the axe after morning
  meeting and research call
• Salespeople on phone with clients to find out
  whats up to buy sell
• Markets open at 930am make constant calls and
  watch screens
• Call for the sale of a stock several clients want
  comes over top
• Client calls and you tell him you have some stock
  hes interested in without letting him know how
  much you can unload (dont want to hurt the
  account)
• Trader takes position on stock and trades on
  market instinct

8
ST vs. Investment Banking

• Salespeople and traders are independent, working
  on commission to bring to the market the
  financial products others create
• ST is a sprint IBanking is a marathon
• Must have NASD Series 7 and 63 to talk or trade
  securities
• IBankers help clients raise money or advise on
  MAs ST professionals make clients money
• Lifestyle ST professionals are the first-in
  and first-out in the investment bank, arrive
  6-7am and leave shortly after markets close

9
Useful Websites

• http//www.vault.com/nr/hottopiclist.jsp?ch_id240
  cat_id3131
• http//www.collegejournal.com/researchindustries/r
  esearchindustries/salestrading-v.html?refreshon
• http//www.wetfeet.com/Content/Careers/Securities
  20Sales20and20Trading.aspx