Broker or trader: Which profession is right for you?

Are you having difficulty choosing between careers as a Wall Street trader or stockbroker? Both involve the buying and selling of securities, but their nature is quite different. These changes may play an important role in determining which occupation is best for you.

In this article, we will explore these differences and how to become a trader or broker.

Broker or trader: Which profession is right for you?

What do brokers and traders do?

Although both brokers and traders are engaged in securities transactions, brokers are also sales agents who act on their behalf or for securities or brokerage companies. They are responsible for acquiring and maintaining a roster of ordinary individual customers (also known as retail customers and/or institutional customers). On the other hand, traders tend to work for large investment management companies, exchanges or banks, and they buy and sell securities on behalf of the assets managed by the company.

Buy and sell

The broker has direct contact with the client. They buy and sell securities according to the wishes of these customers. Some may even act as clients’ financial planners, formulate retirement plans, handle portfolio diversification, and advise on insurance or real estate investments if their company provides such financial and wealth management services. They deal with stocks and bonds, as well as mutual funds, ETFs and other retail products, and options for more sophisticated clients.

Traders tend to buy and sell securities based on the wishes of the investment company’s portfolio manager. Traders may be assigned certain accounts and are responsible for formulating investment strategies that are most suitable for the client. Traders work in different markets—stocks, debt, derivatives, commodities, foreign exchange, etc.—and may specialize in one type of investment or asset class.

Brokers often spend a lot of time keeping clients informed of changes in stock prices. In addition, brokers spend a considerable amount of time to expand their customer base. They do this by cold calling potential customers and showing their background and abilities, or holding public seminars on various investment topics.


Brokers and traders both review analysts’ research to advise clients or portfolio managers on buying and selling securities. However, traders often conduct their own research and analysis. Despite the old stereotype of individuals shouting quotations and orders on the trading floor, most traders now spend their time in front of the phone or computer screen, analyzing performance charts and improving their trading strategies—because profit is often all due to timing.

However, there is no doubt that brokers and traders are often energetic. They are usually proficient in multitasking and able to cope with fast-paced, high-pressure environments, especially between 9:30 a.m. and 4 p.m. Eastern Standard Time-when the market opens.

Become a Wall Street Trader

Now that we have provided you with an overview, it is time to learn more about what it means to be a Wall Street trader. (The metaphorical meaning of “Wall Street” used in the financial services industry. In the digital age, traders can and can work anywhere.) Although we will focus on the trading industry, we will focus on the path to becoming a broker-background and education ——Almost the same.


Traders are once again self-taught. Nowadays, a four-year university degree is a basic requirement-at least, if you want to work in a reputable financial institution or company. Most traders have degrees in mathematics (especially accounting), finance, banking, economics, or business. This is not to say that liberal arts traders cannot have a successful career-any field that encourages research and analytical thinking can develop useful skills. But please don’t get me wrong, number computing, finance and business affairs are important parts of the profession, so you need to be satisfied with them.

Some aspiring people even go on to earn MBA degrees, where they study business, analysis, microeconomics, and business planning. Others are studying for a master’s degree in finance. This route provides an opportunity to learn financial calculations, advanced financial concepts, global investment, risk management, and fixed-income instruments such as bonds and treasury bills.

No matter what your major, you should know as much as possible about the financial market.Develop the habit of regularly watching financial channels or reading business publications, such as Wall Street Journal Or a website like this.

Although there have been some leaps after graduating from university, it is not uncommon for traders to have other types of work experience before entering the field. They may work in the finance department of a company. This is especially true for brokers-given the high level of customer interaction, any previous sales experience is highly valued.

Set off

The easiest way to enter the Wall Street corporate trading desk (the department that conducts securities trading) is to apply to an investment bank or brokerage firm. Start with an entry-level position, such as a stock analyst or trader’s assistant, and learn everything you can. Many financial companies provide college graduates with internship opportunities — some are paid, some are unpaid — and a year-long training program, especially for those who are expected to obtain a trading license.

Requirements: Exam and license

Unless you just want to trade for yourself, as a trader or broker, you need a FINRA license to execute orders. To obtain a license, you need to participate in some FINRA tests.

To become a trader, you must pass the securities trader representative exam with a score of at least 70. This exam is commonly known as the Series 57 exam. As of July 2021, the test time is 105 minutes and includes 50 questions. It covers trading activities and maintenance of books and records, trading reports, and clearing and settlement.

To become a broker, you must obtain a score of 72% or higher on the general securities representative exam-commonly referred to as the Series 7 exam. This is a 225-minute, 125-question exam that tests the basic knowledge of investment and investment products and the rules and regulations of the United States Securities and Exchange Commission (SEC). Many traders also took this exam.

In addition to Series 7 and 57, many states also require candidates to pass the Uniform Securities Agency State Law Exam, commonly referred to as the Series 63 exam. The Series 63 exam also tests all aspects of the stock market. When individuals get permission from FINRA, they can buy and sell stocks and other securities.

As of October 2020, some changes have taken place in the series of exams. The Single Securities Industry Fundamentals Exam (SIE) replaces the overlapping parts of 7, 57 and other series of exams. Candidates will then take additional, smaller “top-off” exams related to the specific field they wish to enter. The reform will also make the examination process more democratic. Currently, you need to be employed or “sponsored” by a FINRA registered company to participate in one of the tests. Sponsorship is usually part of a financial company’s training program, and the recruitment condition is that candidates are eligible for a license—similar to the way law firms hire graduates to study for lawyers. SIE removed this requirement, but you still must be associated with a FINRA member company to take the highest exam.

To the table and the floor

After passing the exam, you have two years to register with FINRA to obtain a license. Before granting it, you need to conduct a background check (including criminal and financial) and a fingerprint card, and you need to register with the SEC.

After passing the exam and obtaining the license, you can request to be transferred to any vacant trading desk. Here, you will learn how to formulate trading strategies, guide transaction execution, and conduct transactions on behalf of investment banks or corporate clients. At the trading desk, you also have the opportunity to study the company up close and understand the market at the same time. You will gradually identify a niche market for yourself, whether in futures contracts, stocks or debt instruments.

However, you must be screened by the FBI before the actual trading floor starts to be allocated. Since Wall Street traders deal with sensitive financial matters, such as government securities, the bureau will check whether you have a criminal record. This is because if any information is leaked, it may lead to destructive market speculation and economic espionage.

Career direction

A stockbroker with a certain amount of experience can choose a variety of different career paths. Here are some options:

financial consultant

Advisors provide financial advice to their clients and recommend financial investments and tools to them so that they can achieve their goals.

Financial Analyst

They analyze and research trends and data when providing consulting services to others (mainly organizations).

Investment banker

These bankers act as intermediaries between companies and investors. Companies raise funds by selling securities, while investors buy securities to make profits. Investment bankers provide consulting services to companies and help them raise the funds they need.


Although the excitement of working on the trading floor or dealing with the high risks of the financial world can be tempting, let us not forget an important aspect of this profession: salary.

According to the US Bureau of Labor Statistics (BLS), as of July 2021, the median annual salary of securities, commodity and financial sales agents is $64,770. BLS does not separate traders and brokers, but generalizes the above categories. The outlook for the industry is positive-with growing demand for financial services, investment banking and retirement plans, employment growth from 2019 to 2029 is expected to be approximately 4%.

Bottom line

People want to be traders for various reasons. Money is the key, but enthusiasm and fascination with the trends of finance and investment funds are also key. If you also like to deal with people, you may prefer the life of an agent. Whichever way you prefer, be prepared to thrive in a fast-paced workplace-because money never sleeps.


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