[ I N - D E P T H
Long gone are the days when
relationships and a strong book
of contacts are the only things
that matter. People working in the
sales trader role these days need
to be savvy with algorithms and
technology, assisting with best
execution, transaction cost analysis
(TCA), regulation and compliance
amongst other things.
“Before you would speak to a
sales trader about where the mar-
ket is going and what stocks are
busy,” says Horan. “Now most con-
versations are about how the algo
did, TCA, best execution strategies,
the new systematic internaliser re-
gime or regulation generally. They
act more as execution consultants.”
The pressures on banks to
cut costs has seen many exiting
what were once lucrative sales
and trading businesses.
Examples include Nomura
which last year pulled out
of European equities and
Barclays which announced
it was shutting down its
Asian equities division. For
those left, there is greater
emphasis on doing more
with less. Sherman says that
SG has changed its sales trader mix
with around 80% to 85% experi-
enced traders blended with cash
traders who have been moved into
a quasi-sales role and younger,
more junior sales traders trained
to be able to deliver cross asset
sales trading services. It means
that sales traders these days sit
somewhere between a low and
high touch world.
Sherman. “They fully understand
the different algo suites and the
macro and micro structure of the
markets. The best sales traders
fully embrace the low touch and
high touch models offering a fully
rounded service. They both service
the clients and execute deals for
them, acting as a one-stop-shop.”
While equities has seen most
change in the sales trader role by
virtue of it being closest to full
electronification, changes have also
crept onto the fixed income desks
in recent times, a world previously
dominated by voice-broking work.
Fixed income sales traders also
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S A L E S
T R A D E R S ]
have to know about electronic
trading platforms and what these
offer in terms of liquidity provision
and pricing. However, the fear of
information leakage in the more
opaque fixed income market means
that this sector relies less on sales
traders with most buy-side orders
placed directly with the trading
desk rather than being called
around the market.
There are other things that a
good sales trader has to be able to
do. From the buy-side perspective,
a top sales trader cannot just be
conversant in single assets, but has
to be able to provide wider advice
“You can’t just rely on machines
and faceless relationships.”
MICHAEL HORAN, HEAD OF TRADING
SERVICES, PERSHING
An invaluable source
“Most sales traders have complete-
ly re-engineered themselves,” says
Issue 51
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