<p>Here is a trick question - what’s the difference between Sales & Trading?</p>
<p>Sales - they are paid a base salary, then they are paid bonus based on their production credit. Before all the foreign firms came to this country, almost every BB firm used a common commission scale - govi on the run bonds were paid x bps/mil, corporate bond were paid a certain scale, structured products were paid higher commissions, etc. If someone were to say their “production credit” was 20 mil, then most employers on the street would know what kind of producer he/she is. Most salespeople would have it in their contract to say if their production credit is between 5-7 mil then bonus would X, 7-10 would be Y. </p>
<p>Many salespeople rely on other people (research, product specialist) to help them come up with trade ideas. But good, smart salespeople crunch numbers themselves and come up with their own trade ideas. Salespeople earn production credit when their clients buy or sell, so if they could help their client swap out some of their holdings with other investment to increase their return, it’s good for the client and it’s good for the firm. People do a lot of trading electronically now, a salesperson must add value.</p>
<p>Sales at many firms are organized by product or by client type. Client type would be like central banks, hedge fund, pension; product type would be muni, corporats, abs, structured credit, equity… A large client would have multiple sales product specialist covering them, and may have an overall senior relationship manager.</p>
<p>Skills required - very social, smart (but not a genius). It is very stressful if you can’t make your production credit, but once you do then you could take it easy (production credit is calculated daily). You are as good as your client list. The biggest downside is it is not a transferrable skill to any other area or industry. Same could be said for trading.</p>