Sales & Trading Breakout

1. Sales & Trading Breakout Michael Dalpe Finance Club 11/13/05

2. Agenda • Equity Cash Trading • Program Trading • Bank of America Summer Program

3. Equity Cash Trading • Traditional method to trade stocks with liquidity concerns • Lot’s of players involved = High Costs • No guarantee of privacy = Potential front running • Must have trust in individual to execute trade

4. Program Trading Topics (cont.) • What is it? • Who are the big players? • What is required to compete? • What % of the market is relegated to Program Trading?

5. Program Trading (cont.) Roles on the Desk: • Program Trading Sales • Customer Facilitation • Agency Trading • Principal Trading • Index Arbitrage • Algorithm creation Role Responsibilities: 1 – 4 involve direct interaction with customer 4 – 6 involve detailed analysis and number crunching 3 – 5 considered “Trading” roles 5 – must be located off trading floor. Usually with proprietary trading group.

6. Program Trading (cont.) Terminology Utilized • Liquidity • Average Daily Volume • Market Neutral, Sector Neutral • Indexes, ETF’s, Futures • S&P 500, Russell 2000, Nasdaq • Index Rebalancing • Algorithms • TWAP, VWAP • Bid Sheet

7. Bank of America Summer Program • 10 Week Rotational Program • 3 – rotations each lasting 3 weeks • 10 week spent on desk of choice • Rank order top choices that include • Sales & Trading & Research (FI only) • FI, Liquid products, Cash Equities, Derivatives • My rotations • Mortgage Trading, Convertible Bond Sales, ETS Sales/Trading • No unique projects given, must find ways to show your value