Although most financial jobs involve spending a lot of time at a desk reading and filling out paper work, traders of stocks, commodities and other investment vehicles work at a much more frenetic pace. Traditionally, traders worked on the floor of a stock exchange where they would hand slips of paper to other traders indicating their desire to buy or sell an investment. Nowadays, an increasing amount of trades are done electronically at trading floors in investment banks and brokerage firms, but the job is still stressful and involves a loud and fast-paced exchange of purchases and sales. Since trading jobs also involve a lot of financial responsibility, the pay for these jobs is often set to reflect the high demands of the profession.
The Types of Wall Street Traders
Nowadays, few traders who work on Wall Street are physically on Wall Street, and the trading floors of a number of investment banks have been leaving New York City's financial district for more remote places. Still, many of these traders buy and sell stocks through the New York Stock Exchange, which is still physically on Wall Street. Traders buy and sell three main investments on and around the NYSE: stocks, bond and commodities. While the salaries for each of these traders are similar, the bonuses that each type of trader gets can vary significantly.
According to the Bureau of Labor Statistics, the average salary for financial service sales agents was $41,920 per year in May 2008. This number includes traders both on Wall Street and on exchanges in other cities, as well as other types of investment salespeople. In December of the same year, the New York Times reported that many Wall Street traders in their twenties could earn $130,000 as a base salary.
Mid-Level and Senior Traders
Traders at higher levels earn higher salaries, with mid-level traders earning $180,000 as a base salary. More senior traders could expect to earn slightly higher salaries, although this is of much less consequence to a Wall Street trader than are the bonuses that have made the New York financial sector infamous.
Bonuses, Commissions and Other Non-Wage Compensation
In the same report, the New York Times reported bonuses starting at a meager $250,000 for entry-level traders, and bonuses of $5 million for mid-level traders. Traders earn the bulk of their compensation outside of their salary -- taking in bonuses, commissions on large trades and earning other perks through the brokerage firms, investment banks and hedge funds that employ them. These bonuses are largely based on trader performance, and enough bad trades can make a trader lose his job -- and with it, the bonuses and salary.