Understanding Trader (Financial) & Job Details

Understanding Trader (Financial) & Job Details

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A financial trader (trader) is a person or entity, in the field of finance, who buys and sells financial instruments such as stocks, bonds, commodities, and their derivatives, in the capacity of agents, hedgers, arbitrators, or speculators. According to the Wall Street Journal in 2004, a managing trader director of convertible bonds earned between $700,000 and $900,000/year.

Trader Type

Traders are either professional (institutional) working in financial institutions or companies, or individuals (retail). They buy and sell financial instruments that are traded on the stock market, derivatives market, and commodity market, which consists of stock exchanges, derivatives exchanges, and commodity exchanges. Several categories and designations for different types of traders are found in finance, these may include:

  • Day trader
  • Floor trader
  • High-frequency trader
  • Pattern day trader
  • Rogue trader
  • Stock trader

The main duties and responsibilities of a Trader

  • Compile relevant information and data
  • Close liaison with sales staff and inter-agent brokers
  • Determining market sentiment through research, assessment, and data analysis
  • Monitoring and performance of international markets
  • Make a price on a specific product
  • Prepare and provide daily trading information
  • Interpret financial/market reports
  • Inform sales staff about market movements/prices
  • Execute trades
  • Get information from sales staff about client problems

Trading offers a high level of responsibility, good promotion opportunities, and impressive financial rewards including large salaries and bonuses. Sales staff are generally known as traders, although there are differences between the two roles, mainly that sales staff travel more and spend more time concentrating on client relations.

Some companies that need the services of a Trader

  • Financial agency
  • Investment bank
  • money changer
  • Foreign currency
  • Treasury department of large companies

Required qualifications, education, and training

Qualifications in economics, politics, business, finance, or numeracy can be useful. Relevant experience, placement, or holiday work (internship) may also be beneficial. Several graduates from economics, accounting, managerial are most often required for this job.

Required skills include:

  • Numerical skills
  • IT Skills
  • Communication skills
  • Analysis ability
  • Interpersonal skills
  • Teamwork skills

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