Stock traders use their technical expertise of financial markets performance to advise and make recommendations to asset managers or shareholders for a profitable investment strategy, considering the company’s performance. They use stock market trading operations and deal with various taxes, commissions, and fiscal obligations. Stock traders buy and sell bonds, stocks, futures, and shares in hedge funds. They perform detailed micro- and macroeconomic and industry-specific technical analyses.
A stock trader typically performs the following duties:
- handles trade corrections
- maintains a relationship with key industry brokers and shareholders
- researches trading strategies
- conducts financial transactions online
- assesses and collates data for financial forecast
- analyzes the financial market to discover trends and improve financial results
- offers advice on the sale and purchase of securities
- contacts prospective clients
- evaluates revenue and cost agreement
- monitors the performance of individual securities and financial markets
- presents information on securities and guides clients towards profitable investments
- documents and shares the day’s gains or losses
- reviews portfolios to ensure that clients comply with domestic regulations
- analyzes the company’s finances and provides recommendations for mergers, acquisitions and public offerings.
Stock traders typically work in a fast-paced environment. They often work from home, in offices or in banks. Stock traders spend most of their time researching stocks. The hours a stock trader works vary as most work independently.
The following job titles also refer to stock trader:
stock exchange floor traders
stock exchange floor trader
Most entry-level positions as a stock trader require a bachelor’s degree in business administration, accounting, economics, or finance. For better career advancement perspectives, a master’s degree is recommended, especially a Master of Business Administration (MBA), because it’s often a requirement for senior-level positions.
In most cases, stock traders must pass a specific license to sell stocks or other securities. The requirements for the license vary according to the position’s location, but in general, it involves passing an exam.
ISCO skill level
ISCO skill level is defined as a function of the complexity and range of tasks and duties to be performed in an occupation. It is measured on a scale from 1 to 4, with 1 the lowest level and 4 the highest, by considering:
- the nature of the work performed in an occupation in relation to the characteristic tasks and duties
- the level of formal education required for competent performance of the tasks and duties involved and
- the amount of informal on-the-job training and/or previous experience in a related occupation required for competent performance of these tasks and duties.
Stock trader is a Skill level 3 occupation.
Stock trader career path
These occupations, although different, require a lot of knowledge and skills similar to stock trader.
Long term prospects
These occupations require some skills and knowledge of stock trader. They also require other skills and knowledge, but at a higher ISCO skill level, meaning these occupations are accessible from a position of stock trader with a significant experience and/or extensive training.
Essential knowledge and skills
This knowledge should be acquired through learning to fulfill the role of stock trader.
- Financial products: The different types of instruments that apply to the management of cash flow that are available on the market, such as shares, bonds, options or funds.
- Securities: The financial instruments traded in financial markets representing both the right of property over the owner and at the same time, the obligation of payment over the issuer. The aim of securities which is raising capital and hedging risk in financial markets.
- Economics: Economic principles and practices, financial and commodity markets, banking and the analysis of financial data.
- Financial markets: The financial infrastructure which permits trading securities offered by companies and individuals govern by regulatory financial frameworks.
- Stock market: The market in which shares of publicly held companies are issued and traded.
- Modern portfolio theory: The theory of finance that attempts to either maximise the profit of an investment equivalent to the risk taken or to reduce the risk for the expected profit of an investment by judiciously choosing the right combination of financial products.
- Actuarial science: The rules of applying mathematical and statistical techniques to determine potential or existing risks in various industries, such as finance or insurance.
- Financial jurisdiction: Financial rules and procedures applicable to a certain location, whose regulatory bodies decide on its jurisdiction
Essential skills and competences
These skills are necessary for the role of stock trader.
- Perform stock valuation: Analyse, calculate and appraise the value of the stock of a company. Use mathematic and logarithm in order to determine the value in consideration of different variables.
- Analyse market financial trends: Monitor and forecast the tendencies of a financial market to move in a particular direction over time.
- Analyse economic trends: Analyse developments in national or international trade, business relations, banking, and developments in public finance and how these factors interact with one another in a given economic context.
- Trade securities: Buy or sell tradable financial products such as equity and debt securities on your own account or on behalf of a private customer, corporate customer or credit institution.
- Forecast economic trends: Gather and analyse economic data in order to predict economic trends and events.
- Handle financial transactions: Administer currencies, financial exchange activities, deposits as well as company and voucher payments. Prepare and manage guest accounts and take payments by cash, credit card and debit card.
Optional knowledge and skills
This knowledge is sometimes, but not always, required for the role of stock trader. However, mastering this knowledge allows you to have more opportunities for career development.
- Funding methods: The financial possibilities for funding projects such as the traditional ones, namely loans, venture capital, public or private grants up to alternative methods such as crowdfunding.
- Banking activities: The broad and continuously growing banking activities and financial products managed by banks ranging from personal banking, corporate banking, investment banking, private banking, up to insurance, foreign exchange trading, commodity trading, trading in equities, futures and options trading.
- Statistics: The study of statistical theory, methods and practices such as collection, organisation, analysis, interpretation and presentation of data. It deals with all aspects of data including the planning of data collection in terms of the design of surveys and experiments in order to forecast and plan work-related activities.
- Holding company activities: The principles, legal actions and strategies of a holding company such as influencing the management of a firm through the acquirement of outstanding stock and other means, more specifically by influencing or electing the board of directors of a company.
- Tax legislation: Tax legislation applicable to a specific area of specialisation, such as import tax, government tax, etc.
- Accounting: The documentation and processing of data regarding financial activities.
Optional skills and competences
These skills and competences are sometimes, but not always, required for the role of stock trader. However, mastering these skills and competences allows you to have more opportunities for career development.
- Trace financial transactions: Observe, track and analyse financial transactions made in companies or in banks. Determine the validity of the transaction and check for suspicious or high-risk transactions in order to avoid mismanagement.
- Develop investment portfolio: Create an investment portfolio for a customer that includes an insurance policy or multiple policies to cover specific risks, such as financial risks, assistance, reinsurance, industrial risks or natural and technical disasters.
- Create a financial plan: Develop a financial plan according to financial and client regulations, including an investor profile, financial advice, and negotiation and transaction plans.
- Synthesise financial information: Collect, revise and put together financial information coming from different sources or departments in order to create a document with unified financial accounts or plans.
- Examine credit ratings: Investigate and look for information on the creditworthiness of companies and corporations, provided by credit rating agencies in order to determine the likelihood of default by the debtor.
- Obtain financial information: Gather information on securities, market conditions, governmental regulations and the financial situation, goals and needs of clients or companies.
- Advise on financial matters: Consult, advise, and propose solutions with regards to financial management such as acquiring new assets, incurring in investments, and tax efficiency methods.
- Provide financial product information: Give the customer or client information about financial products, the financial market, insurances, loans or other types of financial data.
- Maintain financial records: Keep track of and finalise all formal documents representing the financial transactions of a business or project.
ISCO group and title
3311 – Securities and finance dealers and brokers
- Stock trader – ESCO
- What Does a Stock Trader Do? | Indeed.com Canada
- Stock Trader – Job Description – Liveabout.com
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