Stock traders buy and sell securities on a stock exchange, including individual investors, professional money managers, and floor traders. Individual investors often use online brokers, while professional money managers are licensed by FINRA. Trading traders work for companies and must obtain trading licenses. Stock trading is regulated by the SEC and violating rules can result in losing a trading license and paying a fine.
A stock trader is a person who buys and sells securities on a stock exchange. Common types of traders include individual investors, professional money managers and floor traders. Most stock traders work from home or the office, trading over the phone or over the Internet. Trading traders normally work on the trading floor of the stock exchange.
An individual stock trader buys and sells stocks, options and futures to create a personal portfolio. Since there are so many individual investors, trades are usually completed through a broker. Many personal investors use online brokers. Investors who use online brokers often place trade orders over the Internet. These investors are often doing their own research and making trading decisions without the help of a professional money manager.
As this type of stock trader is not carrying out the trades, no professional license is required. Almost everyone can open a brokerage account online. These investors are typically required to make a minimum opening deposit to start an online investment account.
An investor can also choose to hire a professional money manager to manage his stock portfolio and make trades. Professional money managers are also known as investment advisers, investment managers, stockbrokers and wealth management consultants. In the United States, professional money managers are licensed by the Federal Industry Regulatory Authority (FINRA) to conduct business and manage money for their clients. These managers also use brokers to carry out trade orders.
The brokers are also licensed by FINRA and generally combine buy and sell orders from all of their clients. These orders are passed on to a stockbroker. This trader fulfills orders on the floor of the stock exchange in an auction format. Floor traders can also send trade orders to the floor electronically, to be executed by a stock exchange official.
Trading traders work for companies that have one or more seats on a stock exchange. These professionals must obtain trading licenses, usually through the exchange itself. Trading is highly competitive, fast-paced, and stressful work.
Stock trading is regulated by the Securities and Exchange Commission (SEC). Any licensed stock dealer who violates SEC or FINRA rules, or is found guilty of a securities crime, may lose his or her trading license. Such revocation may prohibit the person from trading in stocks for a certain period of time or permanently, depending on the seriousness of the infringement. In addition to losing the trading license, the offender will likely have to pay a hefty fine.
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