Investment management firms hire sales traders to sell and purchase securities in the companies they underwrite. Also known as securities traders, sales traders work closely with asset managers to predict the success or failure of stock securities. Although traders can potentially earn salaries that are far above average, they must be able to tolerate a high level of stress and competitive pressure due to the volatility of the stock market.
Sales traders must communicate the sale and purchase of orders to securities exchanges and firms' trading departments on behalf of investment banks or their employers. Traders are responsible for recording transactions involving stocks, bonds, options, notes and other securities, and keeping their clients informed about buying and selling activity. These professionals constantly research, track and analyse market conditions to develop strategies for maximising the bank’s investment. Sales traders use reports and industry data to perform calculations, track client accounts and determine the amount of potential profit from stock purchases. Other duties include processing sales order tickets, creating financial reports and making sure that trades comply with government regulations.
There are no formal education requirements for sales trader jobs. However, most large firms require that candidates hold a bachelor’s degree in finance, accounting, business administration or economics. Higher level trading positions that offer more responsibility and higher compensation require a master’s degree; some require a master's of business administration. It is common for firms to train new hires on company products and services, securities analysis and public speaking. In addition, traders must obtain a license through the Financial Industry Regulatory Authority, or FINRA, to buy and sell securities. Professionals receive a FINRA license after passing the Series 7 Exam, which tests candidates’ knowledge on Securities and Exchange Commission rules and regulations.
Although analytical, computer and mathematical skills are important in trading positions, employers often look for candidates with a strong work ethic, self-confidence and a desire for success. Sales traders should have previous sales experience in a commission-based role such as insurance or real estate sales. Employers prefer to hire candidates who work well independently and under intense pressure. Sales traders should also have good research and decision-making skills, as they must usually make split-second decisions when taking a position on a stock.
Sales traders rely heavily on commissions and bonuses to increase the potential for higher salaries and competitive compensation. According to a May 2010 PayScale report, securities traders in the United States make salaries ranging from £32,349 to £69,889 per year. However, bonuses varied greatly. The report noted that securities trader bonuses ranged from £3,381 to as high as £55,816.
The Bureau of Labor Statistics predicts that jobs for securities, commodities and financial services sales professionals will grow by 9 per cent through 2018. However, layoffs are expected due to increased merger activity within the investment banking industry and the ability for customers to conduct transactions online without the assistance of a sales agent or adviser. The BLS suggests that entry-level sales agents with previous sales experience and a college degree from a prestigious university will have the best job prospects in smaller investment banking firms.