Trading professionals at investment banks provide liquidity to the firm’s clients (that is, provide clients with the ability to buy or sell a security on demand). Traders do this by standing ready to immediately buy the client's securities (or sell securities to the client) if the client needs to place a trade quickly. This is also called making a market, or acting as a market maker. Traders performing this function make money for the firm by selling securities at a slightly higher price than they pay for them. This price differential is known as the bid-ask spread. These securities may include stocks, bonds, options, commodities, foreign exchange and derivatives. Clients may include portfolio managers at pension funds, insurance companies, hedge funds, banks, money management firms, corporations and consumers.
Traders are based on the trading floor, a high energy and high-pressure environment best suited for dynamic extroverts with excellent communication skills, strong quantitative abilities and thick skin. On a day to day basis traders work most closely with salespeople. In general, traders spend their time managing risk and monitoring developments in the markets.
As a member of a trading team, you will be responsible for providing pricing and sales information in your specialised product area to customers, via the bank’s sales professionals and to other counterparts in the markets.
Traders watch for economic and political events, shifts in currency and interest rates and also key events and execute trades on behalf of their clients. Traders may also advise professionals in capital markets and other areas of the bank on pricing, structuring and timing of new issues.
In addition to providing liquidity and executing trades for the firm's customers, some banks also have proprietary trading desks where traders take their own trading positions using the firm's capital, hoping to benefit from the rise or fall in the price of securities.
Programme requirements
- On track for a 2.1 or above
- Minimum 'BBB' at A level (or equivalent in UCAS points)
- No specific degree subject is required
- Broad knowledge of the finance industry is required
- Excellent quantitative and analytical skills
- Traders need to have strong analytical skills, judgment, decisiveness and self-discipline - all prerequisites for committing large sums of capital on the fast paced trading floor
- Trading roles require strong communication skills, thick skin and a passion for world events and the financial markets
