Investment Management Vs Trader...

#1

Hi.
Ok, this may be a simple question, but I am finding it hard to differentiate between Investment Management and Trader programmes - how would you best separate the two?
I am aware that Investment Management is the investment of private client funds where as traders use… I’m not too sure!
From what I have heard it seems as though traders are pushed a lot harder and work much tougher hours! Although my interpretation may be wrong, it seems as though the two roles are fairly similar… so what would be the reasons for these variations?
Lastly - I know it is not the done thing to ask about salary and bonus’ - but what are the differences in salary and potential bonus’ for the two career directions.

Thanks.

#2

Any thoughts out there?

#3

There’s two type of traders: Sell-side and buy-side. The former focus on executing orders issued by the buyside (e.g. HF). So, a salesperson from an IB would technically have a portfolio of clients to whom he’ll pitch investment ideas. The Portfolio manager will then discuss this with his own analysts. If he likes the idea, he’ll contact a trader.

Essentially, traders have a role of market makers - they provide a bid and ask price. The difference between this, the spread, is the profit. It’s a sell-side trader’s role to maximise this. In a way, he brings together a buyer and seller of equity. Fixed income and futures (commodities) is very different but essentially the former is OTC (over-the-counter).

Buy-side traders have a similar role but essentially they execute orders from the Portfolio manager and decide when the exact time to invest the funds is and in what quantities. e.g. If you buy a million share of Coca-cola in one go, the market could seriously take a hit. So, he does it in shares.

This is very broad but I hope you get the idea.