What does a stockbroker do?

A stock trader carries out various transactions involving stocks and other stock-based financial products, also called stock derivatives.

In essence, a stock trader carries out various transactions involving stocks and other stock-based financial products, also called stock derivatives. Basically, stocks are shares or shares of companies. Most of the time, the stockbroker deals with shares of publicly traded companies listed on the stock exchange. In some cases, however, he or she may conduct over-the-counter (OTC) transactions. They are normally traded and traded privately, that is, without the involvement of a stock exchange.

Depending on the company the stockbroker works for, he or she may be responsible for executing buy and sell orders under the direction of a portfolio manager. If the trader does not work directly for a portfolio manager, he or she can trade with outside investors. This may include individuals, pension funds, asset management firms and others. Sometimes traders will trade stocks using the funds of the company they are employed by. Other times stockbrokers are self-employed and therefore trade on their own risking their own capital.

Companies housed in equity traders typically structure the trading department in a kind of hierarchy. Typically, from top to bottom, the positions will be as follows: senior trader, middle trader and junior trader. Consequently, more advanced stock trading will be carried out by experienced traders and sometimes intermediaries. Junior traders typically deal with relatively simple transactions. In addition, the senior stock trader is usually tasked with designing trading strategies and ensuring that subordinates carry out trades according to plan.

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Before making trades, a stockbroker may use technical or fundamental analysis, or both. Technical analysis mainly involves reading charts from which the trader can deduce likely upcoming price movements. On the other hand, fundamental analysis involves evaluating the underlying pros and cons of a company, which will give the trader reasons to buy or sell its stock.

The most common equity derivatives that traders work with are instruments known as options. Basically, they give the trader the option to buy or sell a specific stock at a certain price within a certain period of time. In addition, the merchant can trade with OTC transactions, which he or she normally carries out through a network of interconnected computers and telephones. In such a network, the trader can trade with other traders to buy or sell shares.

To enter the stock trading career at the junior level, it is usually necessary to have about three years of experience in a trading position. Intermediate level typically requires around four to six years of experience. Finally, senior positions go to candidates who have at least six years of experience.

Additionally, to be eligible for most stock trader jobs, applicants typically must have at least an undergraduate degree. This includes degrees in mathematics, computer science, finance and economics. To work at a company, a stockbroker usually needs to have a license. In the United States, for example, an example of such a license is what is called a Series 55 License. Also, to climb the ladder in a company, it is usually necessary to work hard, in addition to obtaining graduate degrees, and sometimes sometimes take exams for industry-specific certifications.

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