by Brian DeChesare

Sales and Trading Internships: Recruiting, Preparing, and Winning Full-Time Offers

Sales and Trading Internships

There’s a ton of information online about investment banking internships, but comparatively little on sales & trading internships.

That’s partially because there are fewer S&T internships and full-time roles.

But it’s also because it’s more difficult to generalize the experience since each desk is quite different.

That said, we’ve published many articles and interviews about S&T internships over the years.

Up until now, though, the information was a bit scattered and random, so I extracted the most useful bits and updated them for the current environment (including “virtual internships”) here.

What Are “Sales and Trading Internships”?

Similar to investment banking internships, sales & trading internships are extended job interviews for full-time positions.

While it’s harder to fake your way through S&T interviews, some people are still good at interviewing but bad at the job.

Internships allow the bank to assess your performance, attitude toward work, ability to learn and network, and willingness to do grunt work over 8-10 weeks.

During the internship, you cannot place trades or speak with clients because you’re not licensed for those activities.

So, you “shadow” and assist the full-time salespeople and traders with random tasks, do outside research, and make presentations and pitches.

As a result, you rarely have much of a tangible work product at the end.

The goal is to win a full-time return offer so that you have a post-graduation job for at least ~2 years.

Past that, you might stay in the role and advance, move to a different group at the bank, switch industries, or complete an MBA.

S&T internships are offered primarily by the  “large banks” (bulge bracket and middle market firms), and with a few exceptions, such as diversity recruiting, they’re available to undergrads in their final summer.

Who Wins Sales and Trading Internships?

In the U.S., Europe, and Asia, you can describe most S&T interns with the following points:

  • Top schools, such as the Ivy League and comparable schools in the U.S., and the usual suspects in Europe (Oxbridge, LSE, Imperial, HEC, ESSEC, etc.). Hong Kong is traditionally even more skewed toward the top U.S. and European schools (though that may be changing).
  • Non-finance majors are fairly common, so you’ll see everything from economics and government/public policy majors to math, science, and engineering on the more technical desks.
  • Previous internships in related areas such as asset management, private equity, hedge funds, or private wealth management.
  • Local languages are critical for sales roles but not important for trading or structuring because you are not speaking with clients all day there. Read this as: “Languages are important in Europe and Asia but less so in the U.S.”

It is possible to network your way into sales & trading if you do not attend a “target school,” but, as always, it is more difficult, and you need to start earlier.

If you have no internship experience anywhere else in finance, you don’t stand a good chance of winning S&T internships at the large banks.

The Sales and Trading Internship Recruiting Process

waiting

Normally, you recruit for internships well in advance of the start date (6-12 months depending on the region), and you complete them right before your last year of university.

MBA-level internships are rare in S&T, but you’ll occasionally see interns hired out of top business schools.

In all regions, you’ll submit an online application, possibly complete some logic/math/verbal tests online, do a HireVue interview, and then move to the “final round.”

In the U.S., that final round tends to be a Superday (in-person or virtual) where you interview with multiple S&T professionals across different desks and groups.

In Europe and Asia, the final round is an assessment center where you’ll complete additional interviews, participate in group activities, and complete other tasks such as reading about two investment ideas and pitching one of them.

We cover S&T assessment centers in the rates trading article, so look at that for specific tips.

You follow the same process for both sales and trading, and you usually specify your preferred group when you’re well into interviews.

The main differences compared with investment banking recruitment are:

  1. Timeline: The process may start later and move more slowly, especially outside the U.S. Interviews are unlikely to occur an entire year in advance.
  2. Interviews Questions and Skill Sets: While you don’t need to “memorize” as much in S&T, interviews can also be more random and difficult to practice and prepare for.
  3. Sequence of Previous Work Experience: If you’re at a top school, you could probably be competitive with just one internship in a related area rather than two or more.

Networking and Resumes

Networking could range from “strong booster” to “essential,” depending on your university.

If you’re at a target school and you have a solid resume and GPA, you should still do some networking, but you don’t necessarily need to go all-out with it to win an offer.

If you’re at a non-target school, you’ll have almost no chance of breaking into S&T without an extensive networking effort via informational interviews.

But it’s more challenging than IB networking because:

  1. There are no real sales & trading “boutiques” unless you count prop trading firms.
  2. It’s a smaller industry that has declined over the past decade.
  3. And there are time constraints when speaking with traders because they’re busy during market hours – especially right after the open and right before the close.

The overall process is similar: find traders or salespeople on LinkedIn, send emails to request informational interviews, follow up, do quick 10 or 15-minute calls, thank them, and stay in touch over the next 6-12 months.

The main difference is that it’s more acceptable to discuss work and market-related topics… but only if you know your stuff very, very well.

If not, you could shoot yourself in the foot by asking a silly question or suggesting a bad trade idea.

So, I still recommend asking about the other person’s career, how and why they ended up in this group, and their recruiting tips for you.

We have an entire article dedicated to sales & trading resumes, so see that for the template and S&T-specific tips.

The basic structure is similar, but you need to emphasize quantitative and analytical abilities (trading and structuring) or communication skills (sales) as well as your passion for the financial markets.

Interview Questions

Once again, we have an entire article dedicated to sales & trading interview questions, so review that for all the details.

Expect more technical, product, and math/brainteaser questions on the trading side and more communication/teamwork questions on the sales side.

Compared with investment banking interviews, sales & trading interviews require less memorization and knowledge of specific concepts.

However, they’re also more “random” because interviewers could ask you anything, from multistep brainteasers to the details of the Greeks, depending on your stated interests.

There are also some regional differences.

For example, in Hong Kong, it’s very important to develop stock or investment pitches for Asian companies since HK serves many financial markets there (tip: use http://bricadr.com/ to screen for Chinese stocks).

Knowledge of policy issues and “geopolitics” is also more important in regions like Europe and Asia where S&T professionals work across many countries.

Preparing for Sales and Trading Internships

Some argue that you can’t prepare for sales & trading internships because you’ll spend most of your time networking and shadowing full-timers.

If you can’t trade or speak with clients as an intern, how can you “prepare” at all?

It’s a logical question, but the problem is that you do complete projects during the internship, and you still have to ask intelligent questions when networking.

If you walk in without knowing much, it will be more difficult to do both of those.

I would recommend the following preparation in the months before your internship begins:

  • Financial Markets: Sure, keep reading the WSJ and FT and stay on top of major developments, but try to read more technical information, such as specific stock pitches or trade ideas, as well.
  • Product Knowledge: Make a list of the 2-3 desks you’re most interested in and start reading up on the products they trade and sell to clients. You can start with the classic references, like Hull, and then get more specific (e.g., any of Euan Sinclair’s books or Taleb’s Dynamic Hedging reference)
  • Applicable Technical Skills and/or Programming Languages: These vary significantly by desk and role, but it’s safe to say that mastery of the basic Excel shortcuts and a bit of VBA knowledge will help you anywhere. “Real” programming language like Python may also be useful on certain desks as well.
  • PowerPoint / Presentations: In most S&T internships, you’ll deliver an end-of-internship project in the form of a presentation followed by a Q&A from the full-timers. So, it helps to know the key PowerPoint shortcuts and common presentation structures.

If your internship is virtual, the importance of technical skills increases because you can’t “shadow” someone or casually network via Zoom.

There are many courses and books on these topics (including ours on Excel & VBA and PowerPoint), but you’ll learn the most by putting the training into practice and creating your own spreadsheets, programs, and presentations.

One Final Note: It seems there is a lot of hype around programming skills for sales & trading roles.

While they are increasingly important, the “requirements” may be overblown, and skills like Python for processing large data sets are very desk-dependent.

And for sales roles, they won’t help much at all (though Excel and PowerPoint shortcuts will still be useful).

A Day in The Life of a Sales and Trading Intern

The average day starts early (even for virtual internships – keep reading).

Expect to wake up around 5 AM to arrive at the office by 6 AM in places like New York.

The arrival time might be closer to 7 AM in other regions, but you need to be there early for the morning meeting before the financial markets open.

At this morning meeting, the salespeople and traders discuss recent activities, trends in client orders, and upcoming events for the day and week. You observe and take copious notes.

You then return to your desk and read the news or make yourself useful to the full-timers before the markets open.

In most S&T internships, you’ll do 2-3 rotations on different desks within equity trading and fixed income trading, so your immediate co-workers change every few weeks.

For example, you might work in Corporate Bond Trading, Emerging Market Cash Equities Sales, and Equity Derivatives Trading.

Once the market opens, you’ll focus on a few main tasks throughout the day:

  1. Shadowing / Networking Time – You might do this between 10 AM and 12 PM and 1 PM and 3 PM in NY. Traders are busiest around the open and close but have more time to chat in between.
  2. Work on Long-Term Projects – For example, maybe you’ll benchmark regional stocks to an index and determine why clients might want to trade them, or you’ll build an options pricing model in VBA. If you have advanced programming skills, you might even write a script that scans news releases and predicts market reactions based on sentiment. If you’re on a sales desk, your work will be more about researching new products for clients.
  3. Automation Work and Random Tasks – If you notice that a trader is spending too much time on some repetitive task, and you’ve confirmed with him that an automated approach would be helpful, you might work on a VBA or Python script to save him time. On the sales side, you might research clients and summarize the most useful bits.

Other tasks will come up in between.

For example, in in-person internships, you’ll be expected to take lunch orders (and possibly breakfast/coffee orders as well) and pick them up without screwing up anything.

Some interns also create and circulate summaries of the day’s market news, which can be surprisingly useful if done well.

On weekdays, expect to be in the office or “on call” an average of 12 hours per day.

The hours may be shorter for sales roles and longer for trading and structuring because there are more tasks to complete after the market closes.

Some regions, such as Asia, also tend to have worse hours because of the time zone spreads.

How to Perform Well in Sales and Trading Internships and Win Full-Time Return Offers

perform

I’d summarize the key tips as follows (note that some of these apply only to in-person internships):

  1. Wardrobe – Be as conservative as possible and don’t stick out (e.g., avoid expensive watches). Business formal is appropriate for the first week until you learn the group’s expectations.
  2. Meet Everyone At Least Once and Track the Relationships – Even if you focus on 2-3 desks, it helps to meet as many people as possible because the entire floor usually “votes” on return offers. Yes, you should create a simple spreadsheet to track the people you’ve met and what they’ve told you.
  3. Ask Informed and Highly Specific Questions When Shadowing – Don’t ask an options trader, “What is delta hedging?” Instead, ask, “How do you manage your delta hedging for Options X and Y in these market conditions?”
  4. Write Down EVERYTHING – As you shadow traders and salespeople and ask them questions, take notes on all their answers.
  5. Ask Before Embarking on an Extended Side Quest – If you see someone spending a lot of time on a task, you might think you’re being helpful by creating an Excel, VBA, or Python tool to automate that task. But before you do anything, ask the person and confirm that it would be useful first. There may be reasons why they’re doing it manually or special cases you don’t know about.
  6. Get Food Orders Correct – No explanation required.
  7. Be the Last One to Leave – While there may not be “face time” in sales & trading, you still don’t want to leave early as a summer intern. If you have no specific tasks once the markets have closed, work on one of your long-term projects.
  8. Go All-Out with the End-of-Internship Project – At some banks, the end-of-internship project can make the difference between an offer and no offer.

The end-of-internship project is especially important because many S&T desks watch the presentations.

Therefore, even if your desk is not hiring, you might be able to win an offer from another desk that was impressed with your project.

If you want to deliver a great presentation, start early and get feedback from your team on early versions of your presentation.

Make their suggested changes, keep improving the presentation, and do several practice runs.

What About the Conversion Rates?! Show Me the Conversion Rates!!

There seems to be an obsession with the “conversion rates” at different banks (i.e., the percentage of interns that win full-time return offers).

The numbers vary by bank and location, but it’s safe to say the following:

  • Average Rate: The average full-time offer conversion rate is around 50%, with some banks and offices well above that and a smaller number well below it.
  • Bank Philosophies: This happens because banks have different philosophies about interns: some want to encourage competition, others want everyone who might be capable, and others want interns who fit the exact profiles they’re seeking.
  • Improving Your Chances: Desks that have just hired people but which are not in an expansion phase will be less likely to give you a full-time offer. Look for growth areas and desks where full-time staff have recently left.
  • Other Regions: Your chances are usually highest in major financial centers such as New York because turnover is higher, and there are more full-time roles. Your chances are lower in cities with smaller teams and lower turnover.

What About “Virtual Internships” in Sales & Trading?

As I write this in 2021, many banks are conducting “virtual internships” because of the seemingly never-ending coronavirus crisis.

All banks ran virtual internships in 2020, but this year, a few have returned to the office.

Virtual sales & trading internships are not rewarding or useful experiences.

At least on the investment banking side, interns can do “real work” from home by helping with financial modeling, pitch books, and random deal-related tasks.

But in sales & trading, ~90% of the value comes from being on the desk, casually interacting with the full-time staff, and asking questions.

In a virtual setting, it is much harder to get the attention of full-time traders and salespeople, and you might need to schedule discussions.

Here’s what changes in a virtual setting:

  • Work Hours – You’ll still have to wake up early because there will still be a morning meeting, and you’ll still be expected to listen in. Expect an average of ~12 hours per day, but there will be more downtime than in an in-person internship. Unlike in IB, you’re not expected to be online and working until midnight every day.
  • Work Focus – You’ll spend a lot more time doing research, learning the products, and explicitly asking full-timers what they need help with. The end-of-internship project is even more important because they don’t have much else to judge you on.
  • Networking – You’ll have to rely on Bloomberg chat, WhatsApp, and similar apps to meet the other interns and full-timers. You could start by sending a simple Bloomberg message to each trader asking if you could do anything to save them time or if they have a few minutes to speak with you about Topic X.
  • Proactivity – You need to be much more proactive, such as by asking your boss to add you to Bloomberg chats and morning calls and doing occasional one-on-ones. Finding a specific mentor makes a big difference as well.

You could complete a virtual internship and do virtually nothing the entire summer – but then you wouldn’t receive a full-time return offer.

Therefore, if you want a full-time return offer, you need to ask full-timers consistently if you could do anything to save them time or improve their performance and then deliver on what you’ve promised.

Sales and Trading Internships: Final Thoughts

I’m not going to make a long pro and con list here because if you want to work in sales & trading full-time, you pretty much need to do an internship first.

Yes, lateral hiring from other firms and other groups sometimes happens, but it’s far less common than in investment banking.

And MBA-level hiring is also much less common, as sales & trading is not exactly the best group for career changers.

So, deciding to pursue an S&T internship comes down to the sales & trading vs. investment banking debate, which we’ve covered before.

In short, investment banking gives you a broader skill set and more exit opportunities, and it’s more appropriate for most students.

Sales & trading is more specialized but can still be good if you’re more tech-oriented or you want to work with a specific product that is fairly complex.

Also, it may be a bit easier to win sales & trading internships simply because there’s less competition now.

So, if you’re serious, you start early, and you have the right personality, internships could be more accessible even if you don’t have the perfect background.

Just hope that we eventually exit the “virtual internship” zone, so you get the real experience.

M&I - Brian

About the Author

Brian DeChesare is the Founder of Mergers & Inquisitions and Breaking Into Wall Street. In his spare time, he enjoys memorizing obscure Excel functions, editing resumes, obsessing over TV shows, traveling like a drug dealer, and defeating Sauron.

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