I've been thinking about a career as a desk trader. What exactly does this job entail, and what are the best steps to enter this field after college? Are there specific majors or experiences that would help?
A desk trader, also known as a proprietary trader, works for a financial institution or a large bank, trading equity, commodities, or currency with the firm's own money instead of a broker who trades with clients' money. The goal is to generate profits directly for the institution.
One of the first decisions you'll need to consider is your education path. The most relevant majors for a career in trading are finance, economics, mathematics, and statistics, although firms are increasingly valuing quantitative and computer science backgrounds given the shift towards algorithmic and high-frequency trading.
In addition to your degree, there are a few key experiences and skills that could boost your chances of breaking into this field. These include internships in financial services or trading firms, and gaining practical experience. Participating in relevant extracurricular activities, like investment or trading clubs at your university, can solidify your interest and expand your knowledge.
Moreover, you'll need to exhibit certain skills: numerical abilities, analytical thinking, decision-making abilities, and, importantly, stress management. The success of traders is often measured quantitively based on their compliance with risk management guidelines and their ability to generate good profits, which can be a high-pressure situation.
After you graduate, join a trading or investment firm as an associate or analyst. These entry-level roles give you a chance to apply your academic learning in a practical setting and to learn the ropes of the field.
One last note, depending on the country you're in, you may need to pass certain licensure examinations before you can trade. These often test your understanding of financial regulations, trading principles, and ethics. For instance, the Financial Industry Regulatory Authority (FINRA) administers several license examinations in the United States such as the Series 7 and Series 63 exams.
Good luck on your journey to becoming a desk trader!
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