Trading

(see also alternative routes into trading)

Trading usually refers to the trading of financial securities on a daily basis, often executing several trades an hour.

Trading can be in anything, but largely fall into the following categories:

• Equities
• Derivatives
• Commodities such as oil, metals, coffee etc
• Foreign currencies, also known as futures.

What is Trading?

This is the generic term for secondary market activity at an investment bank and covers propriety trading, market making and dealing in bonds on behalf of others (acting as a broker or intermediary).

Who are Traders?

Traders trade securities on behalf of clients. A trader will never speak to a client, rather this is done by a sales person, who acts as an intermediary.

Hours

Unlike corporate finance or investment banking, hours are generally predictable as the markets open and close at set times. Frequently however hours may be anti-social if working the markets in other time zones. Also bank holidays are often worked as it is usually not bank holiday elsewhere in the world.

Earning Potential

As a general rule, the average trader will earn less than the average investment banker, however the best trader will earn substantially more than the best investment banker.

Trading bonuses are generally based on commission, and consequently are based on individual performance and market performance. As your experience grows, your trading limits (the amounts within which you are permitted to trade by the bank) will be increased, and consequently so will your bonus.

Skills Required

Generally speaking, more numerate and analytical skills are required. Also, an ability to stay calm and prudent in tough situations that are your fault is a must. There is no set formula for what makes a good trader; trading is a skill in itself, however it is generally easier for science, engineering and mathematics graduates to find a way in.

Trading is a primarily male dominated role however banks are seeking to change this, having realised that can often women make better traders than men.