by Brian DeChesare Comments (12)

Sales & Trading Exit Opportunities: The Top 10 Ways to Make Your Escape

Sales & Trading Exit Opportunities

As everyone debates whether sales & trading is “dying,” they often lose sight of sales & trading exit opportunities.

But even if these rumors are exaggerated, you still probably want to know what happens if you join a sales or trading desk and decide to leave.

And if the industry is dying, ironically, the exit opportunities are even more important because you’ll need an escape route ASAP.

People usually start this discussion by comparing S&T exits to investment banking exit opportunities and saying that S&T exit options are “worse.”

But that’s not quite accurate.

It’s more accurate to say that the exit opportunities are different and require more time, experience, and real-world results to win:

What Are Sales & Trading Exit Opportunities?

Sales & Trading Exit Opportunities Definition: An S&T “exit opportunity” is a different field that you enter after working in sales & trading for a few years; common examples are hedge funds, proprietary trading, middle office roles, and investor relations.

Most S&T exit opportunities fall into one of four categories:

  1. Discretionary Trading – You devise and execute your own trading ideas using the capital you manage.
  2. Execution Trading – You take your team’s investment ideas and execute them at the best price and terms to maximize profits on the trade.
  3. Non-Trading – This could include anything from risk management to fintech/startups to regulatory agency work to other groups at your current firm.
  4. Sales – If you’re in sales rather than trading, you’re more likely to win roles such as investor relations at hedge funds or sales at a normal company.

Traditional investment banking exit opportunities such as private equity, venture capital, and corporate development are highly unlikely, with a few exceptions for certain desks.

The problem is that you won’t develop the deal analysis, valuation, financial modeling, and market analysis skills these firms usually seek.

If you’re interested in any of these, you should transfer into investment banking ASAP.

What Makes Sales & Trading Exit Opportunities So Different?

The main differences are:

  1. Track Record – You’ll need 3-4 years of real-world results (i.e., your P&L) to win the most desirable buy-side trading roles at hedge funds.
  2. Entry Points – There isn’t quite as much of a “hard cap” on when you can move to the buy-side; some people do it after a few years, but it is also possible at the senior levels.
  3. Timing and Process – The entire process is unstructured, similar to off-cycle private equity recruiting, so you’ll have to reach out to firms and recruiters to get results. And it could take 3-6 months (or more).

Note that these differences apply mostly to trading exit opportunities.

If you’re aiming for non-trading roles (risk management, startups, regulatory agency, etc.), the process is still unstructured, but it’s much more about fit and skill set rather than P&L results.

Since most trading activity at banks now focuses on market-making, not discretionary trading, it’s more difficult to point to “your own” trade ideas.

I don’t think there’s a great solution; you’ll have to review your results and spin your execution of trades into sounding more like independent ideas.

Sales & Trading Exit Opportunity #1: Hedge Funds (Discretionary Trading)

Hedge funds are usually viewed as the most desirable exit opportunity because the pay ceiling is the highest.

If you perform well, you can earn in the mid-to-high six figures and eventually the low seven figures at a more senior level (e.g., Portfolio Manager at a multi-manager hedge fund).

But these roles are also the most competitive, they require a good track record, and you will not be a good candidate for all types of hedge funds.

Of all the hedge fund strategies, global macro is the best fit for most traders because:

  1. It matches up directly with popular desks like rates trading, FX, and commodities.
  2. You will not be competing with investment bankers or equity research analysts because they do not have the skill sets required for global macro.

Besides that, relative value strategies such as convertible arbitrage could work well, and so could certain credit hedge funds.

But you wouldn’t be the best candidate for most equity or event-driven strategies, such as merger arbitrage, since the skill sets are quite different.

Sales & Trading Exit Opportunity #2: Prop Trading Firm

If you can win an offer at a legitimate firm that pays a base salary and benefits and not just commissions, a proprietary trading career can also be lucrative.

The main differences vs. hedge funds are:

  1. Capital and P&L Percentages – You work with much smaller capital bases at prop trading firms, but you also keep much higher percentages of your P&L.
  2. Trading Style – Hedge fund trading is directional (betting on a security’s price going up or down), while most prop trading is market-making (selling/buying from one party and then buying/selling to another).
  3. Advancement and Culture/Lifestyle – If you perform well, you can advance more rapidly at a good prop trading firm. Teams are also smaller, and the environment is less hierarchical than a typical multi-manager hedge fund.

Prop trading firms are like “high beta” versions of sales & trading desks and traditional hedge funds.

The main downside is that the pay ceiling is lower than at large hedge funds because the capital base is so much smaller (but the average compensation may not differ much).

Sales & Trading Exit Opportunity #3: Execution Trading at a Hedge Fund or Asset Management Firm

The difference is that you’re not making investment decisions; you’re taking your team’s ideas and translating them into profitable trades.

It’s similar to the challenge of sales & trading at large banks: you need to split up orders and find buyers and sellers to minimize price disturbances and maximize profits.

The nice thing about this option is that you don’t necessarily need to find a hedge fund whose strategy matches your experience.

For example, if you’ve traded equity derivatives, you could potentially join any hedge fund that uses derivatives to hedge their positions.

Even if you know nothing about their investment strategy or rationale, you can work there as long as you can execute the derivative trades profitably.

The disadvantages are that the compensation ceiling is lower, and there may not be a path to the Portfolio Manager position or any discretionary trading role.

Some Execution Traders can earn into the 7 figures, but it generally caps out in the mid-6-figure range because firms sometimes view it as “support.”

On the other hand, it’s also less stressful than discretionary trading, with better work-life balance and little need to follow the markets outside the normal hours.

Sales & Trading Exit Opportunity #4: Another Front-Office Group or Another Bank

Joining another bank in a sales & trading role isn’t a true “exit opportunity,” but I’m listing it here because it is common to move around – and these jumps usually come with pay increases.

But joining another front-office group, such as investment banking or equity research, is an exit opportunity.

And if you’re in sales, IB groups such as equity capital markets and debt capital markets are solid potential targets.

You have a recruiting advantage because people leave unexpectedly all the time, and banks prefer to fill spots via internal transfers from current employees.

The only problem is that you must act quickly (within 1-2 years) or risk getting pigeonholed.

These other groups offer broader exit opportunities and more transferable skill sets.

Also, IB has better long-term prospects than S&T (ER is in the middle).

Sales & Trading Exit Opportunity #5: The Middle Office – Risk Management

It might seem crazy to leave a front-office trading role for a middle-office one (risk management, treasury, clearing, compliance, etc.).

Certainly, the pay ceiling, even in “better” roles, is lower than in sales & trading.

But your priorities will change as you get older.

An ambitious 22-year-old might be willing to work crazy hours and tolerate constant stress in exchange for a huge payday.

But a 40-year-old with a family and a life outside of work might be less enthusiastic.

Much of the work in the middle office overlaps with traders’ daily tasks, but it’s a definite “downshift” from the stress of the trading floor.

And as a Managing Director in an MO role, you can still earn into the mid-six-figure range.

Yes, this is a big discount to MD compensation in IB and S&T, but it’s also a fraction of the stress, and you can have normal hours and a life outside work.

Sales & Trading Exit Opportunity #6: FinTech / Crypto / Other Tech Startups

This category is newer, but there is a huge demand for traders and other markets professionals who can help startups build financial products – or disrupt existing financial services companies.

There’s even a firsthand account from a reader who followed this path here.

You’ll no longer have to deal with a large bank’s bureaucracy and office politics, and while startup life is still stressful, it’s arguably more interesting than daily life in finance.

If you join a startup, you’ll most likely do so in a product manager role, with a separate set of pros and cons.

If you get into the right company at the right time, you can potentially do very well because of the equity grants.

But that is a rare outcome; more likely scenarios are “the startup fails,” “the startup muddles along,” or “you earn a good amount from a growth-stage company but not enough to retire.”

The other problem is that this entire market segment is highly cyclical and depends on factors such as VC funding, monetary policy, and the IPO and M&A markets.

So, even more than other exit opportunities, the startup route depends on luck and timing.

Sales & Trading Exit Opportunity #7: Regulatory Agency

The final “trading” exit opportunity is also the least-conventional one: you could join a regulatory agency such as the SEC, CFTC, or Federal Reserve in the U.S. or the FCA in the U.K.

They regulate markets, so they need professionals who know the financial markets very well to review, create, and enforce the rules.

The compensation will be far lower – maybe similar to what an Analyst or Associate in S&T earns – but you’ll gain significant power/influence and a wide network.

Plus, you’ll get 40-hour workweeks and generous government benefits/pensions if you stay long enough.

Also, if you get bored, you can leverage this experience to move back to the private sector. Banks love to hire regulators who can warn them of upcoming changes!

Sales & Trading Exit Opportunity #8: Investor Relations for Buy-Side Firms

This one is one of the most common exits for anyone on the sales side.

Just like normal companies need investor relations teams to market themselves and attract the right shareholders, investment firms such as hedge funds also need IR teams.

Part of the job is maintaining existing relationships, answering questions, and publishing performance updates, and part of it might also relate to fundraising from new and existing Limited Partners.

Some funds use outside private placement agents for fundraising, but others have internal groups or do a mix of both.

This is the most obvious exit as a sales professional because you’ll already have a lot of institutional relationships.

Sales & Trading Exit Opportunity #9: Sales at a Normal Company

This one is a variation on the IR/fundraising option above, but it’s less likely because the skill set is less transferable than you might think.

Part of the problem is that “sales” at a bank is more of a “distribution” job.

It’s quite different from cold-calling or cold-emailing small businesses to pitch a new SaaS product.

So, while it’s possible to move into sales in other industries, it’s far less likely outside financial services.

If you want to join a normal company, you might be better off targeting investor relations roles, especially if you worked in equity sales.

Sales & Trading Exit Opportunity #10: Entrepreneurship

Finally, some sales & trading professionals leave the industry and start businesses, ranging from offline retailers or restaurants to import/export firms to VC-backed startups.

This category is so huge that it’s hard to say anything specific – but any trader managing their own book is “entrepreneurial” since the job requires independence and quick decisions under pressure.

Whether these skills translate into starting a company is debatable, but traders should at least be good at identifying market opportunities.

The range of outcomes here is incredibly wide, ranging from “complete failure” to “replace your old income” to “become a billionaire.”

The Best and Worst Desks for Sales & Trading Exit Opportunities

On the sales side, there aren’t that many different exits, so almost any desk could work as long as you build relationships with institutional investors.

That said, groups such as equity sales are more relevant for roles like investor relations at normal companies.

On the trading side, you should avoid areas that are already heavily automated, such as cash equities and spot FX (derivatives are better).

Many desks could work if you want to go the execution trading route because your experience doesn’t necessarily need to match the hedge fund’s strategy 100%.

Derivatives desks can be an especially good bet because many funds use options for hedging.

Also, anything involving illiquid products such as exotics is a good bet for execution trading because price transparency is very low, so execution is critical.

For discretionary roles, the best desks tend to be:

  1. Ones with a macro focus, such as rates trading, FX, commodities, and Delta One, because these lead into global macro funds most readily.
  2. Any specialized desk that pairs with specific hedge fund strategies, such as convertible bonds for convertible arbitrage, credit derivatives for credit hedge funds, or distressed debt for distressed debt hedge funds.
  3. Structured products because they are less liquid and involve a lot of client work, so you gain a broader skill set with these.

I mentioned at the top that exit opportunities such as private equity are highly unlikely, with “a few exceptions for certain desks.”

One exception might be something like a distressed debt desk for distressed private equity roles, especially if you can find PE firms that use “trading” strategies.

(That said, starting in IB is still better in ~99.9% of cases if you want to work in private equity.)

The Future of S&T and Exit Opportunities: Will Everyone Learn to Code?

People often complain about sales & trading exit opportunities, but the real problem is that the industry has become more automated.

So, headcount does not necessarily go up even when revenue increases due to higher market volatility and geopolitical crises.

Going back to the sales & trading vs. investment banking comparison, the main difference here is simple.

Even if you hate banking, the exit opportunities are so good that you could make a case for entering the field just for the exits.

But in sales & trading, that’s not the case because the work is quite similar – you’re still trading – and you need much more of a real track record to win these opportunities.

So, if you’re already thinking about exit opportunities, sales & trading is probably not for you.

For S&T to make sense, you need to be deeply interested in one specific product or desk so you can get very good at it.

Do that, and the exit opportunities will follow.

Further Reading

If you liked this article, you might be interested in reading:

About the Author

Brian DeChesare is the Founder of Mergers & Inquisitions and Breaking Into Wall Street. In his spare time, he enjoys lifting weights, running, traveling, obsessively watching TV shows, and defeating Sauron.

Break Into Investment Banking

Free Exclusive Report: 57-page guide with the action plan you need to break into investment banking - how to tell your story, network, craft a winning resume, and dominate your interviews

We respect your privacy. Please refer to our full privacy policy.


Read below or Add a comment

  1. Thank you for this article. When is the typical time for a trader to exit into prop trading or executional trading for credit/ficc? After analyst years or associate years?

    Should I be contacting headhunters for this? Or what’s the best way to get in touch with those funds?

    1. You normally need your own P&L with at least a few years of a track record. See the comments here:

      It’s more common to move from S&T into exit opportunities at the Associate or VP level. You can use headhunters, but since most recruiting is off-cycle, you can also network around yourself and do it, which is the more common path.

  2. You mention Delta One equity derivatives desks to be good for exit opportunities in the macro space – could you touch on why that is?

    1. It might be helpful because many macro strategies involve derivatives for hedging purposes. Maybe it’s not directly relevant, but if you’re using something like equity indices as part of your strategy (since macro encompasses almost everything), any type of derivative experience might help. But it wouldn’t necessarily be my top choice for global macro hedge funds vs. commodities, currencies, etc.

  3. (Not related to this specific article, don’t know where to write this)
    I just wanted to express my deep appreciation for all the hard work and effort you put into this site. The content is very high quality; in my opinion it is much better than other financial career blogs. You articles are all well written, clear, and thoroughly researched. I am always learning something new through your site, and it gives me a good overview of the financial industry.
    Thank you, Brian.

    1. Thanks! Glad to hear it. When I started this site in 2007, there were pretty much no other financial career blogs…

  4. Great article yet again! I was wondering, do you have any resources regarding how a trader’s PnL is structured at different stages in their career, and how PnL has changed in the past decade? I’ve been interested in this and I’ve found it difficult to look into.

    1. Thanks. Unfortunately, I don’t have any information on that, and banks have been less transparent over time about traders’ compensation. It used to be based on simple percentage splits, but now the formula is more complex and arbitrary. We might try to cover this topic eventually, but it’s incredibly difficult to get anyone to speak about it on the record.

  5. Thanks Brian for such comprehensive and insightful article. What do you think of the exits of electronic trading (mostly equities, occasionally equity derivatives) in a BB? Is it more like an execution trader exit or there’re still chances to roles like PM?

    1. Thanks. I think electronic trading is not the best area for exits that might eventually lead to PM roles. It would lead more naturally into execution trading in most cases. If your role is quant-heavy, you might be able to win quant fund roles, but it depends heavily on what you’re doing there. The biggest issue is that electronic trading in equities is commoditized, so it’s hard for individuals to stand out much.

  6. Jonathan Trabucco

    Talk about cyclical in the exit opp to crypto lol. All the FX junior traders hoping to switch over to a crypto trading shop must be bummed

    1. It is very impressive to go from $15B to ~$0 in 24 hours. Not sure why SBF didn’t just sell and flee to an island…

Leave a Reply

Your email address will not be published. Required fields are marked *