Equity traders buy and sell stock. They analyze market conditions, calculate financial risk and make the most economically beneficial transactions within the stock market. Equity traders must hold at least a bachelor's degree--but many opt for more advanced degrees--and licensure is required.
Equity traders work on the stock market buying and selling securities, or stock. Equity trading involves market analysis, strategic thinking and risk taking. Strong computer and communication skills are required, as well as a knowledge of finance history.
|Required Education||Bachelor's and/or master's degree|
|Other Requirements||Licensure is typically required|
|Projected Job Growth (2014-2024)||10%* (securities, commodities, and financial services sales agents)|
|Median Salary (2015)||$71,550* (securities, commodities, and financial services sales agents)|
Source: *U.S. Bureau of Labor Statistics
Equity Trader Education Requirements
A bachelor's degree is usually required to become an equity trader. Good majors for aspiring equity traders include business, finance, economics and related subjects. Earning a graduate degree in one of these areas can open more job opportunities since many employers look favorably upon advanced degrees.
In addition to a college degree, some employers require or prefer that applicants have one or more securities licenses from the National Association of Securities Dealers (NASD). The most commonly required licenses for equity traders are the Series 7, Series 55 and Series 63 licenses. The Series 7 license qualifies traders as general securities representatives, which means that they can buy and sell all securities products; the Series 55 license is for equity trader limited representatives, and allows them to trade equity and convertible debt securities; and the Series 63 license qualifies traders as securities agents and shows that they have knowledge of the Uniform Securities Act and state securities regulations.
Some employers may also prefer equity traders who have the Chartered Financial Analyst (CFA) designation. To earn this title, a person must meet professional and ethical requirements, complete a structured program and pass three examinations. The CFA charter shows that a person has mastered investment principles and meets a certain level of professionalism.
Equity Trader Career Information
Equity traders buy and sell stock shares through stock exchanges, such as the New York Stock Exchange (NYSE), or through over-the-counter (OTC) markets. They analyze market conditions and evaluate financial risk, then use this information to make decisions to buy or sell stocks. They may use existing trading strategies or develop new ones. Equity traders must know how to take calculated risk.
Equity traders often work in a team environment and need to communicate with a wide variety of people, such as investment managers, portfolio managers and clients. For this reason, good communication skills are desired. Equity traders should also be comfortable operating computers and working with securities software applications, such as trading platforms and portfolio accounting programs.
Career Outlook and Salary Info
The U.S. Bureau of Labor Statistics (BLS) places equity traders in the larger category of securities, commodities and financial services sales agents. According to the BLS, the median salary among all professionals in this field was $71,550 as of May 2015. The BLS also notes that securities, commodities and financial services sales agents were expected to see an 10% increase in job opportunities from 2014-2024, which is faster than the average of all career sectors.
Equity traders have to stay on top of marketing and economic trends and possess strong mathematics and business knowledge. They also need great communication and risk assessment skills.