Trader Jobs

By: EconomyWatch   Date: 1 October 2009

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EconomyWatch

The core Content Team our economy, industry, investing and personal finance reference articles.

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Trader jobs involve buying and selling various products in the financial markets on behalf of a client. A trader is basically responsible for setting up prices and executing trades, in order to maximize assets and minimize financial risk.

A financial trader may deal in the following products:

  • Shares and securities
  • Futures and options
  • Currency
  • Commodities, such as gold and oil

Financial Trader Jobs: Types

Trader jobs can be broadly categorized into three types according to their functions:

  • Flow traders: Also known as market makers, they transact on the financial market on behalf of their employer’s (bank) clients.
  • Proprietary traders: They trade on behalf of the bank itself. Their sole purpose is to buy at the lowest rates and sell at the highest possible value to maximize profits for their employer.
  • Sales traders: They deal with clients directly, acting as intermediaries between the clients and the market makers. Their main functions are supplying market information, executing client requests and promoting new financial products to them.

 

Trader Jobs: Description

Some of the typical functions of a trader are:

  • Executing trades electronically as well as on the phone.
  • Liaising with clients about market movements.
  • Predicting market movements and transacting accordingly. This task is primary for futures and derivatives traders, who make every purchase/sale on the basis of future market conditions.
  • Informing relevant parties about the important trades of the day.
  • Gathering critical information, such as misquoted products.
  • Detailed data analysis and evaluation.

Trader Jobs: Trading Strategies Employed

 

Trader jobs require strong analytical skills and a thorough understanding of the financial market. Since the financial market is very volatile, traders use various strategies to minimize risk, such as:

  • Statistical arbitrage: This seeks to maximize profit on the assumption that prices will eventually move towards a historical average.  
  • Fundamental analysis: This requires reviewing the statements of corporations to assess their financial statements and prospects. Fundamental analysis can be made with respect to an entire industry or economy as well.
  • Macro trading: This involves trading in different financial products simultaneously to hedge the risk. Some macro traders also invest outside the financial markets, such as in real estate.

Trader jobs are typically well-paying, apart from a few entry-level positions. In addition, traders have great career prospects. They can seek employment with various banks and organizations or set up their own trading business. However, there is a high entry barrier to the trading field.


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