What Is an Equity Sales Trader and How to Get the Job

An equity sales trader is a professional who buys and sells stocks, bonds, and other securities on behalf of their clients or firm.

Equity sales traders typically work for investment banks, brokerages, or hedge funds, and are responsible for generating revenue through trading activities.

To become an equity sales trader, you'll need a strong understanding of financial markets, products, and regulations.

A bachelor's degree in finance, economics, or a related field is often a minimum requirement for this role.

A trader is a professional who buys and sells securities, commodities, or other financial instruments on behalf of a client or their own account.

Their primary goal is to make a profit by taking advantage of price movements in the market, often using a combination of technical and fundamental analysis.

A trader's day can be unpredictable, with market conditions changing rapidly, and they must be prepared to adapt quickly to stay ahead.

In the context of equity sales trading, a trader's focus is on buying and selling stocks, bonds, and other securities to meet the needs of their clients or firm.

Their expertise lies in understanding market trends, identifying potential opportunities, and executing trades efficiently to achieve the best possible outcomes.

A trader's work is often fast-paced and demanding, requiring a high level of skill, knowledge, and attention to detail to succeed in this competitive field.

As an equity sales trader, you'll have the opportunity to work in a dynamic and fast-paced environment. You'll be responsible for dealing directly with clients, executing transactions, and managing risk. Your day-to-day role will involve a mix of sales and trading responsibilities.

To get started on this path, you can begin as an intern and assist full-timers by creating tools, running errands, and doing work that keeps slipping off their to-do list. As you progress to Analyst, you'll start out doing similar work to assist senior traders and salespeople, and gradually be granted more trading/client responsibility if you perform well.

The risk limits will increase over time, allowing you to make more aggressive trades with higher potential payoffs. However, this path offers less "career volatility", but also means a lower chance of an outsized bonus if your team performs well.

As an equity trader, your job is to buy and sell stocks and their derivatives. Equity trading deals with companies' stocks and their derivatives, which are financial instruments whose values are based on an underlying asset.

Derivatives can be complex, but the simplest type is the option, which gives you the right but not the obligation to buy or sell a specified amount of the underlying asset at a specified price within a specified time frame.

Equity traders can work in various roles, including executing trades for institutional investors and helping clients buy or sell securities at a price that both sides agree upon. This is known as making a market.

To succeed in equity trading, you'll need to understand concepts like bid-ask spreads, where you'll sell shares at a higher price and buy them at a lower price. The bid-ask spread can be as small as $99-$101.

Here are some key responsibilities of an equity trader:

Equity traders can work in various roles, including sales, trading, and sales-trading. Some common teams in equity trading include cash, derivatives, and exotics.

If you're in sales & trading, you've probably heard rumors about jobs being automated. The truth is, much of equity trading already has been automated. For example, Goldman Sachs had 600 traders on its cash equities desk in 2000, but by 2017, that number had shrunk to just 2.

The Marquee trading platform launched by Goldman in the U.K. is a great example of how automation is changing the industry. With more data available, algorithms can work more efficiently, making human intervention less necessary.

You should be aware that the risk of job displacement is higher for those in cash equities desks, where products are simple and there's plenty of liquidity. This is because there's more data for algorithms to work with.

To reduce the risk of losing your job, consider working on a desk that trades more complex products with less liquidity, such as exotics. This will give you a better chance of staying ahead of the automation curve.

Here are some tips to help you stay relevant in the industry:

Research plays a crucial role in the world of trading, particularly in equity research. Traditionally, investment banks have attracted equity trading business from institutional investors by providing them with access to equity research analysts.

Equity research analysts are a key draw for institutional investors, giving them a competitive edge in the market. Research has traditionally been an essential supporting function to equity sales and trading, representing a significant cost of the sales & trading business.