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What does a Financial Trader do?

By L.K. Blackburn
Updated Mar 03, 2024
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A financial trader is employed by investment banks, financial planning companies, and brokerage institutions to facilitate the purchase and sale of stocks, bonds, and other types of securities investments. The financial trader job description includes finding and advising clients who want to make financial transactions and then completing requested purchases and sales. In most places, a financial trader must be officially licensed by a regional or national financial regulatory institution in order to begin trading.

One portion of the job of a financial trader is to advise clients on investments. As this requires that a financial trader be attuned to the trends and status of the market, keeping up with investment research is a constant responsibility of a financial trader. In addition to stocks and bonds, traders also manage mutual funds, derivatives, currency trades, and commodities for clients. Some financial traders choose to specialize in a particular type of investment, such as a commodities trader specializing in metals or in an agricultural futures market.

Financial traders are also responsible for finding new clients to place orders through the bank or brokerage firm. In this area of the job, traders function as sales agents both for the services of their company and for the financial trade or investment they are offering a client. The job of the trader is to convince the client why the trade is a good investment and why the investment should be done with his company and not elsewhere. To help accomplish this, some financial traders work to prepare reports to present to clients. A financial trader may work with clients in meetings, over the phone, or through email.

In addition to working with clients and taking orders, there are also financial traders that work directly on the floor of a stock exchange to negotiate deals with other traders. These traders directly place the order and complete the transaction as communicated to them by other traders who work for the same bank or firm. Every trader is responsible for ensuring that all transactions comply with local financial regulatory law at all times, such as those of the Securities and Exchanges Commission in the United States.

To become a financial trader, an individual must often first become licensed by the regional or national regulatory board or authority. In the United States, the Financial Industry Regulatory Authority oversees licensing, and it requires that a company sponsor an individual to take and pass a test to receive a financial trading license. In many regions, there are also continuing education requirements that must be fulfilled to maintain the license. Most companies require a bachelor's degree in business, economics, or other related field prior to employment.

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