The trading profession is often fantasized about, with a searing and sulphurous image conveyed by both movies and the media. Reality is quite different.
Salaries depend on many factors (including the financial market, Paris, London...) and are far from high for most traders. Traders’ overall quality of life is often low because of the tight schedules and stress generated by their job. Nevertheless, being a trader is still very attractive to young people. So how do you access these coveted positions? What studies should you go undertake? Which degrees should aim to acquire?
The trading profession
Before answering these questions, it is important to understand what a trader does, to dig into the job itself, the day-to-day work as well as the expected skills for these roles.
Beyond the fact that the trader must "make money" or "make profit", above all they must know how to appreciate and manage risks. This includes so-called "quantitative" methods where mathematical calculations come into play. Knowledge in these areas is therefore necessary, as well as mastering computer tools and programming languages to develop models. A trader’s daily life can also lead them to set and offer prices for various products (from the simplest to the most complex, like structured products) and negotiate them on the market, sometimes in a very short period of time. They also execute transactions, for purchase or sale. Finally, a trader must have a good knowledge of financial products and the economy in a global way, bearing in mind that in most cases they will gradually acquire expertise in a specific area. In any case, we must not forget that English is the normative language in this sector.
In addition, traders can practice in different types of companies with separate associated tasks. Schematically, we distinguish bank traders (or "sell-side" trader) from traders in portfolio management companies (“buy-side” traders). Each have their specificities, but the required skills overlap: qualitative and quantitative analysis, juggling sophisticated models, using statistics and computer science...
Job requirements
The above shows the knowledge and skills that are essential in accessing these positions. Mathematics applied to finance is an almost systematic basis. Broad economics can be welcome but not essential. Knowledge in computer science, development, programming is an undeniable and often mandatory asset in order to access the interview stage of the recruitment process. As a general rule, traders’ common characteristics are rigor, strong work and analytical skills as well as liveliness. Language proficiency is an advantage in order to navigate safely in this international environment. Finally, we must not forget that in these businesses access to information is key: strong communication and synthesis capabilities are vital in order to manage and share information flows in an optimal way.
Studies and degrees
Here is what we are most interested in: required studies and degrees to become a stock trader. The first step to becoming a trader is to obtain a 2:1 bachelor’s degree in a subject such as business, management, economics, accounting, maths and finance. In order to enter the professional world of trading, students are often taken on by companies for graduate training programmes. Most graduates are recruited for these programmes through university job fairs. In order to stand out from the crowd, students are encouraged to hold a postgraduate degree, and more specifically a Masters of Business Administration (MBA).
As an alternative to traditional academic backgrounds, candidates can also enter the trading profession through previous experience in financial services, and even sales. Apprenticeship degrees are also available to financial services professionals. No matter the path taken, internships and personal or extra-curricular activities related to finance are a huge asset to a candidate’s profile.
Beyond degrees
It should be known that the trading profession does not have the same treatment, depending on the countries where it is practiced. London, New York or Hong Kong are the leading hubs in the business. The Anglo-Saxon performance-based culture is present, and wages are higher. Also, even if the academic degree remains important, candidates are mainly judged on other factors. It is interesting, for example, to have a personal trading portfolio and to be able to talk about it in interviews. Similarly, personal projects related to trading and tool development will be appreciated. Finally, the trading profession being relatively demanding and stressful, it is important to show that one is interested in other things in life and has a proven passion for other activities.
