Internship in Sales and Trading division of Investment Bank is an alternative for undergraduates besides the highly competitive ones at Investment Banking Division or Private Equity firms. Having a chance to intern in Sales and Trading is a strong foundation to get a full time role in Bulge Bracket investment banks.
1. What are sales and trading?
Sales & Trading Division is one of the 4 main divisions in investment banks besides Mergers & acquisitions (M&A), Equity Research and Asset Management. The division comprises Sales group and Trading group. While Sales people will “make the market” with responsibilities such as pitching clients to sell/buy stocks, and matching potential buyers to sellers, Traders are responsible for executing the deals including helping clients buy, or sell securities, and distribute stocks and bonds to prospective investors. Sales people and traders play a prominent role in an active financial market.
Salespeople and traders work on the trading floor where they basically help institutional investors or retail investors trade financial instruments. There are some famous trading floors such as New York Stock Exchange (NYSE), NASDAQ, UBS, Goldman Sachs, Morgan Stanley, Chicago, JP Morgan, Bank of America, Citi Bank.
Sales & Trading often pays salary as competitively as Investment Banking. However, the salary for sales and trading often fluctuates more than that of investment banking. For sales and trading analyst salaries in US large banks, they can earn 100,000 USD – 150,000 USD per year.
A highly competitive salary means that you are not averse to work for long hours. Around 60-80 hours per week is very normal for any traders and salespeople. They have to come early before the market opens and work a bit more after the market closes. Meeting clients to build relationships with potential investors is very common as many investors are quite busy with their own work in a day, so the possibility of overtime is high but weekend work is rare. Compared to 90-100 hours per week at Investment Banking division, sales and trading seems to be less nerve-racking in terms of working hours.
When it comes to exit opportunities, Salespeople can move to Investment Banking. Besides, some successful financial salespeople often become stockbrokers or Hedge fund managers who are involved in sales, research and trading. Thus, assisting yourself with tailored experiences to stand out among numerous candidates applying to the buy-side is extremely vital.
Unlike sales career, trading is a bit niche and less transferable. Before entering this career, you are advised to determine what type of trade you want to work in. Some excellent traders move to Hedge fund to become billionaire titans in Hedge fund or Wealth Management but it is quite difficult and competitive. You need to prepare lots of relevant experience to work in the buy-side. Otherwise, some traders can do their own trade after earning some amount of money and a network they already built during the time in investment banks.
2. What do sales and trading interns actually do?
Sales and Trading summer programs usually last for 8-10 weeks including summer analyst programs for undergraduates and Summer Associate Programs which are designed for candidates pursuing an advanced degree such as MBA, MD, LLM, etc. There is one week for training, followed by one five-week rotation and one four-week rotation throughout various desks within the Fixed Income and Equities.
Equity trading desks engage in a broad range of activities for clients: sales, trading, financing, prime brokerage services and market-making in global equity and equity-related securities, options, futures, risk management and hedging products.
Fixed income trading desks’ activities including underwriting, research, and sales and trading of instruments including government and corporate bonds, money markets, foreign exchange, real estate-related assets and derivative products.
Generally, interns will support analyst/associate research market trends and opportunities for clients. They are also in charge of preparing client presentations and building financial models/reports. On top of it, interns assist sales or trading teams with daily work on the trading floor.
Compared with an internship in the investment banking division, an intern on the sales & trading side seems to have less “actual” work. Sales and Trading interns are not assigned significant tasks such as pitching clients or trading financial assets. However, it is still a good opportunity to understand the financial market and network with bankers in order to get a full time role in Bulge Bracket Banks. If you are lucky, you will have a chance to be involved in an actual meeting with some institutional investors and create a presentation for clients. Thus, interns have to put 200% effort in performing and networking during the internship.
3. How to secure a Sales and Trading internship?
Application of summer analyst programs usually starts from April to November. Thus, it is important to attend on-campus events for networking before this time. Besides, when it comes to summer associates programs, applications are released in January, 1st interview in April and on-board in June. Therefore, landing a sales and trading internship requires candidates to network at least 6-12 months in advance; prepare the most-tailored resume, related experience and how to ace the interview. Non target students have to put 200% effort in networking along with an outstanding resume & ace the interview.
3.1 Start to prepare as soon as possible
Before application, the most important thing is a record of strong academic performance (maximize “easy A” classes in the first two years). Besides, getting some supportive finance-related experiences is another priority such as internships in private Wealth Management, Boutique banks, Big 4, Consulting, corporate finance internships at large multinational companies or taking part in investment clubs at university.
On top of it, understanding about all functions in Investment Banks especially Sales and Trading is very important. In this division, it is quite essential to decide what your strengths are:
This track requires strong communication skills and ability in relationship building. Sales people’s daily task is working with institutional investors to pitch a deal.
|This track is for anyone who loves being a market maker and trading stocks/bonds/derivatives everyday. Different types of trading desks will require different expertise: equity, options, portfolio trading, agency trading, etc. Interns who have a background in math/science backgrounds is a plus.|
Besides having an outstanding resume, it is important to focus on networking to get an entrance ticket to a Sales and Trading internship. The ultimate goal of networking is to get your resume passed to HR department of your target firm or receiving some practical tips for an interview. It takes months of effort to talk and follow up different people so at least 6 – 12 months of preparation in advance are highly recommended.
Top school students can approach alumni networks at university. Besides, you can approach current professions in investment banks via LinkedIn, cold call, email, or participate in networking events, information seminars, sport events, golf courses, etc.
An appropriate approach will support for job referrals. Many casual topics such as sports, music, art, etc are helpful for getting to know at a personal level in order to find a common interest between two sides. Our networking guide will give you practical tips in how to network with bankers.
Non-target students should put 200% effort in networking such as sending 50-100 emails per day to professionals in investment banks. Besides traditional ways of networking, it is suggested to attend some diversity programs hosted by Bulge Bracket Banks and some Middle Market Banks which target under-presented backgrounds in investment banks such as women, LGBT, back, minority, Hispanic/Latin, etc. This is an introductory program for 1-3 days which includes 1st interview round to pipeline internship in the following years.
Diversity programs are usually easy to network and get an offer because the number of bankers are much more than that in an information session. Specifically, in information sessions at target schools, a banker is surrounded by 20-30 students while in diversity programs, 1 banker is surrounded by 2-3 students which creates in-depth connection opportunities between two sides. Application process usually starts with a resume, an essay talking about your story or opinions about social events.
3.3 Make your resume stand out and finance-oriented
The investment banks generally look for two key differentiators on your resume.
Mistakes: Candidates often just list their activities rather than putting their accomplishments.
Beyond basic mistakes listed out above, what are some of the other common mistakes candidates make? If your resume is not “bankified”, it will be difficult to get past even the 1st screening round. BankingPrep Resume Toolkit is here to make your resume stand out among the piles of thousands of prominent candidates, and make it finance-oriented even for non-target backgrounds. Your profile will be proofed properly to make sure it has absolutely NO mistakes.
3.4 Ace the interview with your strong understanding of the financial market and your story
What do recruiters evaluate?
Recruiters will evaluate your skills, your technical knowledge, and how you are interested in the position you apply for. Many questions are designed to test these competences. Simply put, interview questions will be around 3 main parts:
- Behavior questions (often asked in HireVue/Phone Interview)
- Fit questions (Superday/Assessment Centers)
- Technical questions (Superday/Assessment Centers)
In which, behavior questions largely resemble fit questions asked during Superday. Some say that HireVues/Phone screen just asks you behavior questions. However, as mentioned above, you can be asked both technical questions and behavior questions right after you proceed to the second round. The full list of interview question samples and what you need to prepare, let’s check on investment banking interview questions. Presented below is the short version of what you should do to have an upper hand in interviews.
How to prepare and ace an interview
You can visit our interview questions articles for analyst and associate roles for more details.
#1. For fit/behavior questions, this is the part where you tell your stories with interviewers. Thanks to these questions, recruiters will learn how your previous academic and work experience fits into the division/industry you apply for.
The questions in the first place always surround:
- Introduce a little bit about yourself / Walk me through your resume
- Your strengths and weaknesses
- Your achievements and failures
- Future plan and why Investment Banking? Why this firm?
What you should prepare here are crafting your own stories (reflecting your achievements, past experience, transferable skills and leaderships), and backing up small personal stories to answer questions related to strengths and weaknesses.
If you have some disadvantages in your profile such as low GPA, non-target background, fewer outstanding accomplishments, fewer finance internships, and etc., you have to prepare stronger responses to make up for these “real weaknesses”.
#2. For technical questions, what you will be interviewed always sticks with accounting, finance, valuations, and practical deals.
- Accounting: Financial statements (types of financial statements, links between different types of financial statements), revenues, operating costs, EBITDA, debt & equity, etc.
- Finance: Equity Investments (stocks), Fixed Income Investments (government bonds, corporate bonds, commodities, currencies) , Derivative Investments (options, futures, forwards, swap), etc.
- Valuation: Valuation metrics and multiples, (Discounted Cash Flow, LBO modelling, etc.), knowledge about mergers and acquisitions, etc.
Beyond technical comprehension, sales and trading recruiters also want to test your knowledge about the market, practical deals and companies. Your work is to keep abreast of news about markets, imminent IPO, bond issuances, etc. The questions largely depend on your experience shown on your resume. That means if you present your active involvement in investment/market-related, you might get many questions about it.
BankingPrep Interview covers topics and knowledge systematically, providing you comprehensive guides to ace an interview for banking roles. What stories you should tell, deep-dive interview questions you should rehearse will be included in the Investment Banking Guide.
Besides, 1-2 interested industries should be prepared in order to talk with Managing Directors who are experts in many industries.
It is also important to prepare 1-2 trading ideas before the second round, they will evaluate your ability in pitching investment ideas with grounded evidence.
3.5 Maximize your performance to convert into full-time role
After receiving an offer to intern in sales and trading, you should try to convert this opportunity into a full-time job. These are the advices should be taken into consideration:
– Update daily news through Wall Street Journal/Bloomberg/Financial Times/Barron. An intern is not always busy, thus spending time making a market brief in one page with bullet points would be helpful for the relationship with other traders.
– First impression is important: In the beginning, formal clothes such as suits or blue/white shirts should be noticed, after 1-2 weeks, you can adapt to other people on your desk.
– Maintaining connection with traders is a key to passing the internship: The lunch time or any other break time are good opportunities to network by self-introduction with other traders, asking tips to maximize performance during the internship. You can take the initiative to ask traders out as they hardly ask you first. When talking with traders, it is necessary to prepare a notebook to keep many insights that they might test you after that.
Although the return rate is not 100%, Sales and Trading internship is still a powerful step to land a lucrative job in Bulge Bracket Investment Banks. The key strategies to win an internship is preparing as soon as possible, networking, having an outstanding resume and ace the interview.