Stock Trading as a Career/Profession

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Stock Trading as a Career/Profession

Stock traders can advise shareholders and help manage investment portfolios. Traders engage in the buying and selling of bonds, stocks, futures contracts, and hedge fund shares. Stock traders also conduct extensive research and observations on the workings of financial markets. This is done through economic and microeconomic studies. Therefore, more sophisticated stock traders will study macroeconomics and industry-specific technical analysis to track asset or business performance. Other duties of stock traders include comparing financial analysis to current and future regulations for their industry.

Professional stock traders working for financial firms must complete internships of up to four months before they can establish themselves in their career field. For example, in the United States, after the internship, you will be required to take and pass the Series 63 or 65 exams administered by the Financial Industry Regulatory Authority. Stock traders who pass the exams demonstrate familiarity with the practices and regulations of the Securities and Exchange Commission (SEC). Experienced stock traders typically obtain a four-year degree in finance, accounting, or economics after obtaining their license. Regulatory positions as traders may often require an MBA to conduct advanced stock market analysis.

The U.S. Bureau of Labor Statistics (BLS) reports that stock and commodity traders are expected to grow by more than 21% between 2006 and 2016. During this period, stock traders will benefit from trends driven by the decline in the pensions of the baby boomers and their dependency ratios on Social Security. Trading in U.S. Treasury bonds will also be more volatile. Stock traders who are new to the field will have a difficult time because entry positions are scarce. Although competition to enter this career field is high, increased ownership of stocks and mutual funds will significantly boost a trader's career. Banks also provide more opportunities for middle-income people to invest in stocks and speculate. The U.S. Bureau of Labor Statistics (BLS) reports that the median annual income for stock traders is $68,500. Experienced stock and mutual fund traders have the potential to earn more than $145,600 per year.

Unlike stockbrokers, who arrange trades between buyers and sellers and receive a guaranteed commission on each trade, professional traders may have to go through a steep learning curve and a highly competitive performance-oriented career that can be short-lived, especially during a typical stock market crash. Stock market transactions involve significant risks, uncertainties and complexities, especially for unwise and inexperienced stock traders/investors who seek to make easy and fast money. Moreover, business activities are not free either. Stock speculators/investors face many costs, such as commissions paid to brokers and other services, taxes and fees, such as placing buy and sell orders through stock brokers and stock exchanges. Depending on the nature of the national or state laws involved, a series of financial obligations must be complied with, and transaction, dividend and capital gains taxes will be levied by the jurisdiction within its taxing powers. However, these financial obligations vary from jurisdiction to jurisdiction. Among other reasons, in some cases, taxes may have been built into the stock price through the various laws that companies must comply with in their respective jurisdictions. Or tax-free stock market operations help promote economic growth. For example, in the United States, stock gains are generally taxed at two rates: For long-term capital gains (stocks sold after owning for at least one year), the current rate (2024) is 20%. For short-term forward transactions (stocks bought and sold within 12 months), capital gains are taxed at conventional rates (e.g. 28%, 30%, 35%).

Stock market volatility can lead to mental health issues such as anxiety and depression. This is consistent with research on the long-term effects of the stock market on a person's mental health. Experienced stock traders and investors usually have a degree of mental resilience to cope with these disruptive factors over the long term or throughout their career or financial performance. They are always at risk of being affected by health issues. It's up to them.