Floor brokers execute trades on behalf of a company’s customers, not for themselves, and can specialize in a specific commodity or work generally on a stock exchange. They need to be able to handle stress, deal with different personalities, and have basic skills. They must pass an exam to participate in trading and work under the auspices of their companies. Education levels vary.
A trading floor broker is someone who executes trades on the trading floor on behalf of a company’s customers, in contrast to a trading floor trader, who transacts on his own behalf. These stock market professionals can work for companies of all sizes and can specialize in a specific type of commodity or work more generally on a stock exchange. One of the advantages of working as a floor broker is that you are not directly exposed to the risks of market volatility when a trade goes wrong.
Also known as pit brokers, floor brokers receive orders from their companies and execute those orders on the ground. Your goal is to get the best deal, whether buying or selling, for the company’s customers. Once the order is completed, it is logged and the customer is informed that the deal was completed successfully and what the result was.
Working on a stock exchange can be extremely stressful and very hectic. Floor brokers need to be able to deal with a wide range of personalities and deal with a fast-paced work environment. They also need to have some more basic skills, such as the ability to clearly project their voices so they can be heard over the noise of the trading floor, and the aggressiveness to take a good deal and confirm it.
To become a floor broker, someone usually needs to pass an exam that allows them to participate in trading. Floor brokers are sponsored by their companies and work under the auspices of the companies that employ them, which means that when they make mistakes, the company pays for them. These errors can range from protocol violations, which result in fines from the exchange, to a failed trade. Many mistakes can be dismissed as companies are not interested in bearing the expenses of their employees.
Every exchange has slightly different conventions and rules that brokers should be familiar with. Many exchanges have classes designed to familiarize people with life on the ground and the procedures that brokers and traders need to follow. These classes prepare people for the exams they must take to work.
The level of education for a floor broker varies. Some do not have advanced education, progressing based on natural skills and the ability to work early on. Others may have a university degree in finance and related subjects.
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