<p>Haha, yes, I remember reading Monkey Business and Liar’s Poker. Both are absolutely hilarious (although a bit exaggerated) accounts of IBD and trading, respectively. Keep in mind that both accounts took place a while ago (MB in the early 90’s and LP in the early 80’s), so they’re a bit outdated. Both banking and trading are a bit tamer now, especially trading.</p>
<p>In terms of the differences between M&A and S&T:</p>
<p>High level overview:
M&A is a subgroup of IBD, which is the corporate finance side of a bank. IBD folks work directly with companies to provide financial advice, help raise capital (either debt or equity), advise on mergers and acquisitions (M&A), etc. It’s very transaction/deal-oriented. Analysts spend most of their time developing pitch books and financial modeling via Excel. In sales & trading (S&T), your work involves buying and selling securities, which can be equities, options, commodities, fixed-income products, currencies, etc. Your day to day work will involve monitoring positions and updating accordingly, and may also involve modeling and analyzing companies/markets.</p>
<p>Skills required:
IBD requires lots of endurance, stamina, and attention to detail. Nothing about it is intellectually challenging - modeling is simply working with elementary-level formulas in Excel. But there’s no room for error - you’re expected to not have a single typo even after 100+ pages of data. S&T is definitely more quantitative, but not to any real extent - quickness and mental math ability is much more important than sheer knowledge. Unless you’re a quant, you’ll never need to use differential equations. You also need to be good at multi-tasking and making quick decisions - traders often will be using 8 monitors at a time, as well as talking on 2 phones at once. After all, when you’re trading, every second is a precious opportunity.</p>
<p>Hours:
IBD has very long hours (80-100), but there’s lots of downtime. S&T hours are shorter (50-60) because most of your work occurs when the markets are open. S&T hours are also much more predictable and regular, whereas in IBD, you never know when you might get called in to the office.</p>
<p>Stress:
Both are very high stress roles - there’s no way to sugarcoat it. The stress in IBD is more due to the long hours than anything else, whereas in S&T, the stress comes from the fact that, every second, there’s an opportunity to make or lose money. And you can lose a lot very fast. I like to use this analogy - think of S&T as having to take a timed exam, and think of IBD as having to do a take-home project. The hours are longer in IBD, but S&T is more intense.</p>
<p>Salaries:
Both have good salaries. At the analyst level, base and signing bonus for both roles should be identical. Year-end bonuses are similar as well. At the senior levels, there’s more variability in S&T pay, i.e. the best traders make much more than the top bankers. But the catch is that S&T is a much more volatile job. A top trader one year may easily get fired the next if he loses a ton of money.</p>
<p>Hierarchies:
In general, they’re the same: analyst -> associate -> VP -> senior VP/director -> MD. IBD is more rigid though, where even if you’re a star, it takes a certain number of years in each position to move on to the next. In S&T, if you’re good, you can rise up the chain very fast. Also, most associates in IBD have an MBA (in most firms, it’s almost a requirement), whereas few traders have advanced degrees.</p>
<p>Difficulty to get in:
Both are difficult to get into, considering they’re the most sought-after jobs among elite college students. IBD interviews will focus on fit, general industry knowledge, and finance/accounting knowledge. S&T interviews will also focus on fit, but will test your mental math abilities and knowledge of markets and investing.</p>
<p>You mentioned that you want to have a role that requires you to think. Both jobs will, believe it or not, develop your analytical thinking skills in meaningful ways. You’ll get lots of industry exposure and corporate strategy exposure in IBD, while you get more insights on various markets and quantitative stuff in S&T. I’m a bit biased towards IBD, because I believe it develops a broader range of skills and knowledge. In S&T, you’ll likely become an expert on some esoteric derivative product, but will know little about anything else. The exit opps from IBD are much more broad, from PE to VC to corporate development. From trading, you basically have to either stay in trading or go to a hedge fund.</p>
<p>Let me know if you need anything else answered.</p>