Why equities sales and trading

A Week in the Life: Investment Banking VP As you become a banker, you begin to shift from modeling and number crunching to relationship building. This gradual transition happens during the senior associate phase as the associate begins interfacing with existing clients. Today, we're very excited to release our complete Internship Rankings.

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By: Vault Careers. Published: Aug 01, Topics: Day in the Life. Related Articles. Our Internship Rankings Are Here! View More. Related Content. Eric, 26, is an associate at a midsized private equity firm in Manhattan a.

To do well in this role, you must be good at quickly coming up with trade ideas that interest clients instead of pitching the fundamental-oriented ideas that salespeople might present. Since the role involves client relationships as well as quick thinking based on market news, it is somewhere in between Sales and Trading and is labeled as such.

Unlike Sales-Traders, the Traders here complete both agency trades and risk trades the hedge fund trade described earlier. The most important skill on this desk is market instinct : You need to be good at mental arithmetic, and you must react quickly to events and major happenings. Using simple call and put options, you can create more complex strategies, like the straddle buying a call and put option at the same strike price, which gives you a positive payout if the stock moves up or down by a certain amount by option expiration.

There are dozens of other strategies with colorful names, like the butterfly , the iron condor , and the strangle. And then there are also index options and Delta One products derivatives with linear, symmetric payoff profiles, such as equity swaps.

Options trading is far more complex than stock trading because there are more variables and relationships to track. You might be correct about several variables but still lose money on a trade because one parameter changed dramatically. This desk requires a mix of quantitative ability and market instinct. The challenge is that you need to multi-task very well and act quickly because the options market is highly liquid. Exotics are the most mathematically complex and least liquid of all the products within Equities.

If you work in this group, you create and price these structures for clients and then manage the hedges once a deal is complete. You often hedge the risks of the transaction with plain-vanilla structures, such as normal options or equities. There is very little liquidity for most of these products, so you focus on the pricing behind them. Exotics is all about nuances and small details that can make or lose a lot of money, so you must have outstanding attention to detail and a serious quantitative background for this desk.

Your risk limits will increase over time so that you can make more aggressive trades with higher potential payoffs. The day-to-day role will not necessarily change that much as you move from Analyst to Associate to VP to Director to Managing Director unless you move to the managerial side and stop trading actively. Compensation for traders and salespeople is highly variable since so much of it is linked to your performance.

But as of , you can expect the following rough ranges for traders at bulge-bracket banks in New York:. That is one major disadvantage of working at the large banks: Cash compensation at the senior levels is much lower than it is at prop trading firms or hedge funds. Most traders stay in trading, move to a hedge fund or asset management firm , or join a prop trading firm. If you want to do so, you should make a move sooner rather than later e. For more details, please see our articles on the hedge fund industry and the hedge fund career path.

If you work in sales rather than trading, you will get broader, but slightly different exit opportunities. For example, you could join the sales team at a normal company , or you could move into fields like investor relations that are relationship-oriented. In his spare time, he enjoys memorizing obscure Excel functions, editing resumes, obsessing over TV shows, traveling like a drug dealer, and defeating Sauron. Free Exclusive Report: page guide with the action plan you need to break into investment banking - how to tell your story, network, craft a winning resume, and dominate your interviews.

Hi Brian, what do you think of a career in delta one trading? Is it about automating yourself out of a job, or do you think it would provide some good experience? Real Estate.

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