What is sales and trading
By SuperdayReps · Michigan Ross Undergrad | Wharton MBA · ex-Citi | ex-Greenhill · Former Head Mentor at a Leading IB Prep Service
16 min read · updated November 3, 2026
A pension fund decides at 10am to sell $50 million of a corporate bond. Nobody else in the world happens to want to buy that exact bond at that exact moment. The fund calls a bank, and within a minute it has sold. The bank bought it, will hold it until someone wants it, and carries the risk in the meantime. That service, being there with a price when a client needs to trade, is the core of sales and trading, and almost everything else on a trading floor follows from it.
Interviews for sales and trading, called S&T, open with the questions this lesson answers: what does the division do, how does it make money, which desk do you want, sales or trading, and why not banking. Most candidates have heard the words. Far fewer can explain where the money comes from, or why a desk that captured every spread can still lose money on a busy day. That gap is where you can stand out early.
A trading desk sells liquidity. It quotes a two-way price, a bid where it will buy and an offer where it will sell, and takes the other side of the client's trade. The gap between the two is its revenue. Its profit depends on what it does with the positions that client flow leaves behind. At a bank today the risk it holds is there to serve clients, not to bet on the market.
Where S&T sits in a bank
An investment bank has two big client-facing halves. Investment banking advises companies on mergers and raises money for them by selling new stocks and bonds. Sales and trading, often called the markets division, deals in securities after they exist: it buys and sells them for investors every day.
Both halves are the sell side. Their clients are mostly on the buy side: mutual funds, pension funds, insurers, hedge funds and others who invest money. Companies and governments trade with the desk too, usually to hedge a risk. The lesson on clients walks through each one and what it wants.
One more split matters. Bankers working on an unannounced deal hold private information. Sales and trading sits on the public side and is walled off from that information, because traders buy and sell the very securities a deal would move. Life on the trading floor covers how that wall works.
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Frequently asked
- What does a sales and trading division do?
- It makes markets for institutional investors and companies. When a client wants to buy or sell a bond, a currency, a stock or a derivative, the desk quotes a price at which it will buy and a price at which it will sell, and trades right away. Sales owns the client relationship and trading owns the price and the risk.
- How does a trading desk make money?
- Mostly by buying at its bid and selling at its offer, so it earns the gap between them, called the bid-ask spread. It also earns commissions on trades it executes for clients without owning them, and fees from lending cash and securities to hedge funds. The spread is the revenue, but whether the desk keeps it depends on how well it manages the positions clients leave it holding.
- What is the difference between sales and trading?
- A salesperson owns client relationships: knowing what each account holds and needs, bringing ideas, and bringing orders to the desk. A trader owns the price and the risk: quoting when a client asks, deciding how much risk to hold, hedging it, and answering for the desk's profit and loss. The two jobs depend on each other.
- What is the difference between FICC and equities?
- FICC stands for fixed income, currencies and commodities: government bonds and swaps, corporate credit, foreign exchange, commodities and securitized products such as mortgage bonds. Equities covers stocks: cash trading, equity derivatives such as options, and prime brokerage, which lends to and services hedge funds. Most banks split their trading floor along that line.
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