Job Description for a Trader
A trader applies financial acumen and knowledge of securities markets to trade on behalf of a firm or clients. He evaluates economic data for securities listed on financial markets and determines adequate values for those investment products. A trader's schedule is flexible, and it typically depends on the operating hours of securities exchanges.
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Nature of the Work
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A trader evaluates corporate financial data and economic trends on a periodic basis, and she uses statistical tools, such as VaR (value at risk) and Monte Carlo simulation, to identify appropriate risk and price levels for securities in which she is interested. A trader also partners with a firm's portfolio managers, research analysts and assistant traders to periodically review investment opportunities in a company's portfolio. A trader who uses corporate funds to invest in securities markets is referred to as a proprietary trader.
Education and Training
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A college degree is usually not necessary for a trading position, but most organizations, especially financial institutions, require that traders hold, at a minimum, a bachelor's degree in finance, accounting or business management. A master's or higher degree is required for traders with major supervisory responsibilities or those managing substantial portfolios on behalf of companies or clients.
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Wages
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A trader's total compensation includes salaries and cash or stock bonuses. Performance-based bonuses are usually a major part of a trader's compensation. The Bureau of Labor Statistics of the U.S. Department of Labor indicates that 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 and trading analysts earned median wages of $73,150 in 2008, excluding annual stock and cash bonuses, with the lowest 10 percent earning less than $43,440 and the highest 10 percent earning more than $141,070.
Career Development
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A trader can advance by seeking a higher academic degree. For example, a trader with a bachelor's degree can enroll in a university's master of business administration program to improve chances of promotion. A professional certification, such as chartered financial analyst (CFA), also can be a career booster. An experienced and qualified trader is promoted to a senior function, such as head trading strategist, portfolio manager or investment manager, in a few years.
Working Conditions
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A trader's schedule usually depends on stock market operating hours. For instance, a New York-based trader who focuses on Asian markets works at night. He may periodically travel to meet with major corporate clients. A trader with major managerial duties works a standard 8:30 a.m. to 5:30 p.m. shift. She attends regular training sessions to stay up-to-date with regulatory and ethical requirements.
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References
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