Career Planner: Financial Industry

The Basics
Self-Reflection
Job Profiles – Management
Job Profiles – Sales Department
Job Profiles – Research Department
Job Profiles – Trading Department
Job Profiles – Underwriting Department
Selection
Training Directory

TRADING DEPARTMENT:

Traders work closely with the firm’s sales and underwriting department and are usually divided into divisions represented by the particular product that they trade with. The type of securities traded and the nature of trading transactions are dictated by the certain type of business that the firm operates in. Trade order clerks, also called Order Trader or Approved Traders, link buy and sell orders from the sales department to the stock traders, so they can trade on the exchanges without any precious time wasted, as many of these orders are time sensitive.

The bonds traders typically utilizes their firm’s inventory to buy and sell bonds and debentures, or their firm have some form of cooperation with other firms so that they can trade from these other inventories. In many cases, they also trade money market instruments. In contrast, the stock traders don’t trade from their own inventory unless they are dealing with OTC markets. Otherwise, the norm is to trade on exchanges.

Firms also employ other different kinds of specialists for other financial instruments, such as options and futures and money market instruments and even specialists for a particular group of commodities or a certain sector of the economy. Some of the more exclusive trading environments in these firms may include high frequency statistical arbitrages, hedge funds, options & futures, foreign exchange and currencies.

COMMON TITLES:

Order and Approved traders, equity traders, fixed income traders, options & futures traders, Hedge Funds Trader, High frequency quantitative traders, statistical arbitrage traders

GENERAL ACCOUNTABILITIES & DUTIES:

*Analyze and execute trading orders while employing systematic trading strategies

*Track and monitor the availability of positions within the marketplace

*Quantify fair market values within sectors and identify opportunities based on client needs

*Quickly respond to requests, questions, or trading issues from clients, exchanges, regulators, internal compliance or other parties

*Help identify client trading requirements, as well as provide market related data and news over the telephone.

*Assist with post-trade ticketing and processing and with the resolution of clearing and settlement issues

*Monitor electronic trading systems and order flow to ensure proper operation, regulatory and trading limit compliance and to identify any potential issues and take corrective action

*Contribute to the design and implementation of new electronic trading products and services and development of systematic trading strategies

*Junior level traders in brokerage firms assist Financial Advisors and their clients with placing trades on securities and advise the use of online trading systems

*Hedge funds traders would hedge the company’s current book and create new hedging strategies

*High frequency traders work with a team of experienced traders and quantitative analysts who are responsible for linear risks, high turnover activities and correlation models

KEY SKILL REQUIREMENTS:

*Able to multi-task in a fast moving, stressful environment. For example: placing trades on the system while on the phone and approving orders.

*Mental discipline with quick thinking and focus, as well as the ability to solve problems under pressure

*Strong working and theoretical knowledge of the type of securities trading that they are being hired for

*Knowledge of trading regulations, market structure changes, technical developments of trading platforms, industry rules & regulations

*Ability to read and interpret documents, such as financial statements, financial market indices, rates, articles, contracts and reports.

*Ability to calculate figures and amounts, such as discounts, interest rates, commissions, proportions, percentages and amortizations

*Experience with trading platforms such as JP Morgan and Pershing’s platforms is a plus

*Proficient with the use of Bloomberg and Reuters market data information systems

*Programming skills, including C++, Java, and familiarity with VBA and/or .NET frameworks are highly valued and required for high frequency quantitative traders, statistical arbitrage traders and traders utilizing sophisticated trading platforms

*Requires a strong mathematical aptitude with exceptional analytical, strategic and critical thinking for options & futures, statistical arbitrage and high frequency quantitative traders

ESTIMATED RANGE OF SALARY:

*Order and Approved traders earn in the range of $35,000 to $50,000.

*Registered Security Traders (equities, bonds, options) can earn $50,000 to over $100,000 and entitled to bonuses

*Fixed income and foreign exchange traders’ salary is dictated by bonuses that are tied to trading profits

*High frequency quantitative traders and statistical arbitrage traders with advanced programming and mathematics skills earn at least $100,000 and may go up to $1 million or more, dependent on the success of past strategies and performance results.