Financial Trader Job Description
A financial trader applies quantitative methods, such as math-based worksheets, to identify investment opportunities in securities markets. He also relies on a support team to identify, appraise and monitor financial risks, such as market and credit risks, in securities in which he is interested. A financial trader usually has a bachelor's degree in a business field.
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Nature of the Work
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A financial trader who uses a corporation's fund to invest in global stock and bond markets is referred to as a proprietary trader. A firm records in its portfolio's income account all profits made and losses incurred in proprietary transactions. A financial trader tests trading ideas and tools with risk management, information technology and finance staff to ensure these tools are functional and adequate. Examples of trading tools include VaR (value at risk) and stress simulation.
Education and Training
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A financial trader with major responsibilities within a company typically has a master's degree in finance or economics. A doctorate degree is generally the norm for quantitative traders who use econometrics and statistics in trading processes. A junior financial trader holds a four-year college degree in accounting, finance or business management. A liberal arts major also can work in the field.
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Wages
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A financial trader's total compensation includes wages as well as bonuses. Economic trends and investment returns on securities markets have a major impact on a financial trader's remuneration. Bonuses are usually performance-based, and it is not uncommon for a financial trader to receive a substantial bonus if stock markets show positive returns. The Bureau of Labor Statistics of the U.S. Department of Labor indicates that financial traders earned median wages of $68,680 in 2008, excluding annual stock and cash bonuses, with the middle half of the profession earning from $40,480 to $122,270. The same research shows that financial trading analysts earned median salaries of $73,150 in 2008, excluding annual stock and cash bonuses, with the lowest 10 percent of the occupation earning less than $43,440 and the highest 10 percent earning more than $141,070.
Career Development
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A financial trader can advance faster if she gets a higher academic degree, such as a master's or doctorate, in economics or financial engineering. She can also seek a professional certification to improve her chances of promotion. A skillful and effective financial trader is promoted to a senior role, such as portfolio manager, senior investment strategist or head trader, in a few years.
Working Conditions
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A financial trader's schedule usually depends on the operating hours of stock markets. If, for example, he is based in New York, but trades on international markets, he must work at night or early in the morning. A financial trader can also have a regular 8.30 a.m. to 5.30 p.m. schedule on weekdays if he supervises a team or performs major administrative duties.
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References
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