Do you regularly have the overwhelming desire to shout “Buy, buy, buy! Sell, sell, sell!” at the top of your lungs? If you do, you should probably avoid doing it randomly on the bus. You wouldn’t want to scare the other passengers now, would you? Instead, you should consider pursuing a career as a financial trader.
Admittedly, financial traders don’t spend their entire day running around trading floors, barging into each other, sweating profusely, panicking, undoing their ties and screaming “BUUUYYYYY!!!!” or “SEELLLLL!!!!” until their heads explode. However, they do work under lots of pressure and they do need to make important decisions quickly and confidently.
Essentially, financial traders buy and sell financial products, such as bonds, shares and assets, on behalf of investors, i.e. investment banks, large companies and wealthy individuals. These dynamic front-office professionals liaise with investment analysts, and use their own analytical skills and financial knowledge to survey the financial markets and make predictions.
They then have to make prompt decisions about when to buy (preferably when the price is low) and when to sell (preferably when the price is high) securities and other financial products. The ultimate aim is to make as much money as possible for their client, whilst reducing financial risk.
Financial traders can typically be divided into three distinct types:
– Proprietary traders
– Flow traders
– Sales traders.
A proprietary trader buys and sells financial products on behalf of the bank that employs them.
A flow trader executes trades on behalf of their bank’s clients.
A sales trader acts as a mediator between the client and the people who are responsible for actually executing the trades. Rather than directly making risky decisions like flow and proprietary traders, sales traders take orders from their clients and communicate them to the traders who are working on the front line.
Generally, a financial trader’s job involves liaising with clients and colleagues, analysing data, making quick fire decisions, and finalising trades online or over the phone. Finally, they also have to complete routine administrative duties to keep track of deals made, assets acquired and money lost.
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Salary & benefits
Entry-level traders tend to earn between £31,000 and £46,000 per annum. Once you have gained sufficient experience, your annual salary will increase to anywhere between £45,000 and £80,000 per annum.
Some senior associates can earn up to £250,000 a year. Traders are also usually paid sizeable bonuses based on performance.
Expect early starts. Financial traders tend to start at around 6.30am. Some days you may finish at 5.30pm, but other days you might be in the office for a lot longer. Different markets, however, operate at different times and this will, therefore, have an impact on your working hours.
Aspiring financial traders should be ready for lots of stress and pressure.
You may also be required to travel internationally from time to time.
Investment banks only tend to recruit the very best graduates. Candidates with a degree in any subject can enter this line of work. However, a 2:1 classification is usually the minimum requirement.
If you study a relevant subject, such as business studies, economics, maths, statistics, operational research or accounting, you may stand a better chance of securing an entry-level position.
Completing an internship or work experience placement with an investment bank is a great idea, and pretty much essential for entry into this competitive area of work. A recent report from High Fliers revealed that 75% of graduate vacancies at top investment banks are filled by students who have previously done work experience or an internship with the company.
Training & progression
Many financial traders start their career as part of a graduate scheme. These training programmes tend to last around two years. If you are accepted onto a graduate scheme, the majority of your training will be done whilst on the job under the supervision of senior traders. You will also have the opportunity to attend in-house training sessions from time to time.
Traders need to be registered with the Financial Conduct Authority before they can start trading, which means passing a number of exams.
As part of your training programme, you will also be given the opportunity to complete the professional examinations required to become a member of the Chartered Institute for Securities & Investment.
As you gain more experience and move up the career ladder, you will become an associate and then a senior associate. Some people eventually move into director-level roles. The international nature of trading means that you may have the opportunity to work abroad at some point in your career.
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