When you become a trader, you could find yourself working in any number of fields. The financial markets are diverse, with different fields, such as share trading, Forex trading, Gilts, Futures and Options, to name just a few.
While you could specialise as a trader in any field, you will find the type of job will have different responsibilities. Those will be based on the type of financial trader you work as.
Working as a flow trader, you’ll be employed with a bank, or other financial institution. Your job will be to buy and sell products, on behalf of the companies clients. That could involve a range of financial instruments, or solely dealing in one type of trade.
Although futures and options will often be combined together into one job role, as they often intertwine. Foreign exchange, shares and Gilts though could be assigned as individual job roles, but for the most part, a flow trader will be proficient in a variety of trades, so they can offer clients a diverse range of financial products, to broaden their investment portfolios.
This is one of the most difficult jobs to get, and you will need a professional portfolio along with a proven record of successful trading.
The reason it’s difficult to get into a proprietary trading position is that you’ll be working with a bank, or financial institution.
Not working for them.
That’s a key difference as when you work with them, you’re dealing with a huge budget, which can be in the millions. The benefit here is that you won’t be dealing with clients, but the people you do deal with are going to be senior executives, and you are going to be held accountable for your actions. Banks rely on their proprietary traders to accomplish two things.
1) Minimize their risk
2) Maximize profits
Since you’re dealing with a huge budget in this position, you don’t have a margin for error. You will need to be highly proficient, able to make decisions, excel in technical analysis, and make sound judgement calls based upon your market research.
As a sales trader, you’ll be highly involved in building client relations. Your job is going to be more of an advisory role, advising clients on different financial products that could be suited to their financial interests.
You’ll also be required to work closely with other traders, in order to keep your knowledge up to date of the different financial products available, as well as which assets you may be required to increase sales of, based on the company objectives.
The main duties are primarily to buy low and sell high. You will do this through being proficient with economic data analysis, technical analysis, putting your experience to use, and also cross-asset correlations to help you identify undervalued financial products, that allow you buy in a lower price than current market value.
Most financial traders will start their careers as a sales trader, progressing to become a flow trader, and for those who aspire to reach the top of their profession, a proprietary trader could be the dream job, dealing with multi-million pound budgets, making huge investments, and gaining massive rewards.