Brokers vs. Traders
While both brokers and traders purchase and sell securities, brokers are also sales agents, either on their own behalf or for a securities or brokerage firm. Traders, on the other hand, tend to work for a large investment management firm, and they buy and sell - or trade - securities on behalf of the assets managed by that firm.
Brokers tend to have direct contact with clients, either individual or institutional, and buy and sell securities based on those clients' wishes. Traders, on the other hand, tend to buy or sell securities based on the wishes of a portfolio manager (or managers) at an investment firm.
Finally, a broker is also a sales agent and is responsible for obtaining and maintaining a client roster.
Background of Brokers and Traders
Brokers and traders tend to have high energy levels and strong communication and negotiation skills. They are usually proficient at multi-tasking and must be able to cope with a fast-paced, high-pressure environment.
If you are considering a career as a broker or trader, you should learn as much as you can about the financial markets. Reading The Wall Street Journal or The Financial Times, or watching the financial news on CNBC, is a good way to start.
A business degree is not required to enter this field, but if you are an undergraduate student considering a career as a broker or trader, it is advisable to take classes in economics or finance as well as in business and sales if your college offers them. Popular majors for those that go on to become brokers and traders include: economics, finance, business and math. Many have also studied physics, biology or electrical engineering. Even liberal arts graduates, such as those that major in history, English, political science and philosophy, have gone on to successful careers as brokers or traders. However, be advised that the road to success as a broker or trader will be longer and more difficult if you do not have any education in business or finance.
