After working many years helping out professionals to join the financial jobs industry with junior broker jobs and trader jobs, we are explaining in this FAQs page briefly and clearly the main differences between these two job titles: broker vs trader.
Both career paths involve buying and selling securities, but here are some of the main differences:
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- Brokers buy and sell securities based on their clients’ wishes. They deal not only with equities and bonds, but mutual funds, ETFs and other retail products, as well as options. Some may even act as financial advisors for them, shaping a retirement plan, dealing with portfolio diversification, and advising on insurance or real estate investments, if their firm offers such financial and wealth management services.
- Traders, on the other hand, buy or sell securities based on the wishes of a portfolio manager. A trader might be assigned certain accounts, and charged with creating an investment strategy that best suits (i.e., makes money for) that client. Traders work in different markets – stocks, debt, derivatives, commodities and Forex, among others – and may specialize in one type of investment or asset class.
- Brokers spend a fair portion of their days looking to expand their client bases, then spend a great deal of time keeping clients informed of variations in stock prices, basing on analyst research.
- Traders often do their own research and analysis, spending their time on the phone or in front of their computer screens, analyzing performance charts and polishing their trading strategies.
People want to become traders for making money purposes, but they also have passion and fascination with financing and the movements of investment funds. If you love dealing with people as well, you might prefer a broker‘s life.
Broker vs trader: whichever you choose, be prepared to thrive in a fast-paced workplace, to have high energy levels, to be proficient at multitasking and cope with a fast-paced, high-pressure environment, especially between the hours of 9:30 am and 4:00 pm EST, when the markets are open.