What do they do day in and day out?? I see ads for firms hiring sales traders but they need to have their own "book"... Their "book" I assume is institutions but how does it all work???
Sales traders receive "Worked" orders from clients and execute the orders. Worked orders are custom orders by the clients. They also monitor trades for clients to make sure the trade orders are executed correctly. So they are like your paid trade desk where a client sends a bulk order and the sales traders execute them best they can based on the market condition. The reality is... Due to all the Algo. Orders (VWAP and others), most orders are just manually forwarded to the Algo. model platform. With the Sales traders just sitting back. Of course, they monitor the execution done by the Algo. engine. Currently, the sales traders are mainly a phone sales person who calls clients up and kissing their ass to trade more. It used to be something worth it, but now... it's a trade desk sales job.
Wouldnt the clients (hedge funds, investment firms, etc) have their own platforms to execute trades? Are the Sales trades calling them with ideas for trades? From your description it sounds like they are just order takers.
Sales Traders call the buy side traders while broker institutional sales and analysts call the fund managers and buy side analysts. Focus is different i.e Sales traders focus on alerting to "flows" and heads up for events, whereas sales and analsysts focus more on the fundamentals.
A well rounded Sales Trader also stays on top of research/fundamentals, and occasionally finds the other side of a trade before an algo. Nowadays it is survival of the fittest, since a machine can execute for .01. The good old days of $500K order takers are long gone.
Sales Trader sounds a lot like what a retail stockbroker does except he is getting his clients from institutions, pension funds, mutual funds and hedge funds.
An institutional ST does more servicing of existing institutional clients vs smiling and dialing for perspective clients! I covered institutional Equity accounts for an IB from 1992-2002. The landscape has dramatically changed as far as compensation and number of Institutional traders/salestraders since 2002. surdo
what does this job lead to up the ladder?..and how does one get in the door?... I know you need a license, but besides that...
You need to know someone . Depending on the product, it's not as lucrative as it once was. I was in the high yield bond biz for a decade , and much of the money everyone made was in spreads between buys and sells , but the NASD started making everyone report their trades to an electronic system called TRACE , and the spreads, and most of the liquidity , narrowed significantly.