The three main trades of the stock market

The three main trades of the stock market

As financial products continue to multiply year after year and the financial market is constantly changing, we offer an introduction to the three main trades of the stock market.

The trader

Since we mention the trades of the stock market, the trade of trader is always the one that makes the most fantasize. Salary delusional, daily panting, but what is it in reality?

What does the trader do?

A trader is a trader. Its primary goal is to earn a margin from its purchase and resale operations. He generally has significant means with which he will seek to achieve substantial margins. Traders must demonstrate a significant ability to understand the markets and their movements in order to achieve short-term, high margin trading.

The market is complex, there are many types of traders, including the stock trader. The qualities required are multiple:

  • Advanced analytical skills (in-depth mastery of mathematics)
  • Risk control
  • Ability to anticipate markets
  • Understanding of information and if possible programming

A recent study by the FBF (Fédération Bancaire Française) estimates the number of traders at 3,000 on French territory.

Remuneration of the trader

Since the 2008 crisis, remunerations are officially communicated in reports by financial institutions. We can see that traders’ salaries have been rising steadily since the 2008 crisis.

Beginner Between € 48,000 and € 72,000 gross annual
Confirmed (4 to 5 years of experience) Between 150 000 and 300 000 € gross annual

Most of a trader’s remuneration is variable. Thus a novice trader will already be offered bonuses representing up to eight times his fixed salary. And for the best traders the remunerations fly fast to reach several million euros.

This ever-increasing remuneration is a response from French financial institutions to try to retain their talents, especially in the face of pressure from the English market. In London, the average salary of novice traders is € 28,000 per month . In 2015, no less than 19 billion bonuses were paid in the City.

The financial analyst

An essential support function for any brokerage firm, the financial analyst is less prominent than the trader, but no less important.

What does the financial analyst do?

If the trader is often the star of the team, he also needs teammates to perform. It is on teams of financial analysts that he can generally rest. Their mission? Monitor the health and growth of publicly traded companies. Using analysis and briefing notes, they will advise traders in their day-to-day operations.

The Financial Analyst position can serve as a springboard for a first job as a portfolio manager or trader. There are more than 12,000 financial analysts in the banking sector.

A financial analyst can also be called a salesman, because his analyzes are shared directly with the clients of brokerage firms in order to generate movements and investments.

Finally, some financial analysts are specialized in graphical analysis. They are then called chartists. Their goal is to determine potential levels of turnarounds and to accurately define buy and sell signals.

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