Sales & Trading Overview
SEO-U Webinar
Matt Stephenson
Program Manager
mstephenson@seo-usa.org
S&T Webinar Content
I.
II.
Investment Bank Overview
Sales & Trading
i.
Characteristics & Skills
ii.
Fit
iii.
Job Functions
iv.
A Day in the Life
v.
Products
III.
Stock-Trak
I.
Website Tutorial
II.
Trading Examples
IV.
Additional Preparation
I.
Websites
II.
Movies
Overview of an Investment Bank
Ø Corporate Finance: Investment
Bankers help corporations raise
money through stock & bond offerings
or advise clients on mergers and
acquisitions. “Primary Market”
Ø Project Length: Deals can take
months or even years to complete
Ø Job Requirements: Working around
the clock to create “pitch books” or
large PowerPoint presentations for
clients and detailed financial modeling.
Ø Revenues: The investment bank
receives fees in the form of a
percentage of multi-million/billion dollar
deals.
Ø Sales & Trading: Salespeople and
Traders sell the Investment Bank’s
financial services, generate investment
ideas and execute trades for the firms
clients. “Secondary Market” (Sell-side)
Ø Project Length: Every trade is a deal;
usually completed at a fast, minute by
minute pace.
Ø Job Requirements: Early
mornings, passion for the financial
markets, desire to interact with
clients, ability to multitask and work well
under pressure.
Ø Revenues: The investment bank
receives commission in the form of
cents per share traded.
Clients: Corporations, High Net Worth Individuals, Asset
Managers, (Buy-side) Mutual Funds, Hedge Funds,
Pension Funds
Sales & Trading
Characteristics and Skills
Common Characteristics
• High interest in the financial
markets
• Basic understanding of
economic drivers
• Excellent communication &
interpersonal skills
• Social & professional
adaptability
• “Thick skin”
• Problem solver
• Quick thinker
Skills Developed
• Relationship management
• Prioritization
• Market /industry knowledge
• Stress management
• “Thicker skin”
• Intimate knowledge of financial
products
• Financial modelling
• Salesmanship
Sales & Trading Fit
Students with the following affiliations/interests have
often been drawn to positions within Sales & Trading:
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Athlete
Poker player
Organization/club leader
Quantitative major
“People” person
Strategist / Planner
These categories are not exclusive, but if you fit into any
of them, Sales & Trading may be for you!!!
Sales & Trading Environment
Market-Focused! Fast Paced! Quick
Decision Making! Persuasive
Speaking! Quantitative! Analytical!
Risk Takers! Competitive! Action
Oriented! Team Environment! Early
Mornings! Intense! Opinionated!
Trading Floor Photo
Sales & Trading Job Functions
• Salesperson: Manages long-term client
relationships, sells firm products, develops investment
ideas
• Salestrader: Jack of all trades, manages client
relationships, distributes client trades, pitches trading
and investment ideas
• Trader/Market Maker: Executes trades, gives clients
market information, develops trade ideas
• Structurer: Designs new products, builds complex
trade models, develops solutions for customer needs
• Research Analyst: Gives recommendations to buy or
sell securities, interacts with company
management, researches industries and companies
Day in the Life of an Equities Trader
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5:45 AM: Alarm Clock goes off!
6:15 AM: Reading the Wall Street Journal on the way to work
6:30 AM: Sitting at my desk reviewing news that came out overnight
7:00 AM: Listening to the Morning Research Call over the trading hoot
7:30 AM: On the phone with Buy-side Traders pitching stock ideas
8:00 AM: Depending on the news and futures indications, I decide to be a
buyer or seller of my stocks
9:30 AM: Market Opens
9:30 AM – 4:00 PM: Locked to my four computer screens as I buy and sell
stocks for large institutional investors. I eat lunch at my desk because I am
so busy. Throughout the day, I discuss trade executions and stock ideas
with clients, sales traders, research analysts. The busiest parts of the day
are the first and last hour of trading.
4:00 PM - 5:00 PM: I wrap up the day, touch base with sales traders about
intraday trades, and do independent research on my stocks.
5:30 PM - ?: The trading day is done but I may still have a client dinner or
recruiting event for my firm. Traders believe in the “work hard, play hard”
motto and frequently socialize together after work.
Sales & Trading Products
Stocks: Stock shares are portions of ownership
in a company. Stockholders purchase
stocks, hoping that their investments will rise in
price, so that those stocks can be sold at a profit
at some time in the future.
Stocks are products of the EQUITIES DIVISION.
Sales & Trading Products
Bonds: Companies sell bonds to borrow cash.
If you buy a bond, you’re essentially lending
cash to a borrowing entity. In exchange for the
use of your money, the borrower agrees to pay
you a certain amount of interest for a specific
period of time (coupon payments). You make
money through the interest payments or if the
price of the bond rises.
Bonds are products of the FIXED INCOME DIVISION.
Sales & Trading Products
Derivatives: A security whose price is dependent
on one or more underlying assets. Some
common examples of derivatives are options,
futures and securitized products.
Derivatives are traded in both the EQUITIES and
FIXED INCOME divisions.
Next Steps: This Fall
As an SEO-U student, there are several things that you can do to
prepare yourself for a role in Sales and Trading:
• Join your school’s investment club
• Read a business periodical (i.e. WSJ) 3 – 4 times a week
• Complete these recommended Zoologic courses: Fixed Income,
Banking Sales Skills, Equity, Derivatives, Finance Basics and
Risk Management
• Review company websites
• Pick 3 of your favorite companies and generate stock pitches for them
Next Steps: This Summer
Stock-Trak is the Internet's most comprehensive virtual stock
exchange simulator and fantasy stock market game available.
Browse the Stock-Trak site for information on stock investing
research, fantasy stock market trading, and the latest in stock
investing tips.
Unique Features Stock-Trak Offers:
• Market, Limit, and Stop orders accepted
• Class ranking by risk adjusted measure (Sharpe Ratio)
• Used by 80% of the top U.S. Business Schools and 50,000 investors
last year.
• During your SEO-U summer, SEO will hold two trading game
challenges. The topics covered will be (1) Equities (Duration: June
23 – August 15) and (2) Fixed Income (Duration: July 21 – August
15) The winner for each challenge will receive a prize (to be
determined later) from SEO.
Access Stock-Trak Through the
SEO-U Online Community
Login Information
Your Email Address
SEO Emailed Password
Use Red Toolbar to Navigate
through Stock-Trak
Before Beginning, It’s Important
to READ THE RULES
Before Trading, Click “Summary” to
check your balances
Click “Trade” to begin trading
securities
Stock Trading Example
Stock Trading Example
The trader bought 150 shares at $504.77 each. Total cost is $80,624.15. If
the stock trades above $504.77, say to $604.77, the trader makes the
difference ($100) times the number of shares he bought (150 shares) for a
profit of $15,000 or 18.6%.
Bond Trading Example
The Trader thinks that interest rates are going to be lowered by 50 basis points at the
next Federal Reserve meeting. He wants to buy government bonds because he thinks
the decrease in interest rates will make the interest rate of the 5 year treasury bond
more attractive causing the price of the bond to rise. He thinks that he will be able to
sell the bond for a higher price.
Additional Trading Tutorials
The “?” next to Bonds on the Transaction
screen will give you additional Bond trading
information. Click “Rules” on the transaction
screen for information about option trading
strategies.
Click “Transactions” to view
recent account activity
If you have technical
Questions, email the Stock-Trak
Help Desk
Useful Sales & Trading
Websites
•
www.minyanville.com (FREE membership with a .edu email address;
helpful tutorials; market commentary from industry professionals)
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www.fool.com (Helpful tutorials)
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www.bigcharts.com (Best interactive charts)
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www.marketwatch.com (Tools & Research)
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www.finance.yahoo.com (More Tools & Research)
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www.wsj.com (Required daily reading for anyone interested in S&T)
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www.barrons.com (Weekend magazine feat. stock ideas & weekly
recap)
VAULT GUIDES ARE FREE THROUGH THE SEO-U ONLINE COMMUNITY!!!!
Sales & Trading Movies
§ Wall Street
§ Boiler Room
§ Pursuit of
Happyness
§ Rogue Trader
§ Trading Places
Wall Street’s Bud Fox & Gordon Gecko
***Many of these movies depict what not to do as a sales & trading
professional, but they will give you a peek into the fast pace and
determination needed to succeed***
With SEO-U, Stock-trak, and
preparation, we hope to see you
on Wall Street next summer!