Future trader? Understanding salaries and careers

Who hasn't imagined themselves in the shoes of a trader on Wall Street, juggling purchases and sales with colossal financial stakes in their hands? Far from being a simple bank employee, the trader handles sometimes considerable sums of money with finesse, while minimising the risks for his clients. With IPAG Business School, find out what traders are really paid, the factors that influence their remuneration and the studies that will help you become a dynamic and seasoned future trader.

What is a trader?

You probably have an idea of what trading is all about. Trading means "to trade" in English. The term is used to describe the act of driving a market by carrying out the best possible buying and selling operations. Traders know how to navigate the hustle and bustle of fluctuating markets and use their responsiveness to generate profits in international trading.

Thanks to a thorough mastery of mathematics, statistics and IT, as well as a tactical approach to global economic concepts, the trader exploits his full potential in a variety of ways.

They may be bank traders or independent traders. They may also work for different types of financial institution, such as investment companies or listed companies. A trader acting on behalf of a company handles the funds entrusted to him, whereas an independent trader puts his own capital at risk.

A number of qualities are essential for this complex profession:

• alertness, agility of mind;
• adaptability; high resistance to pressure and stress;
• facility with mathematics and statistical tools;
• fluency in English

What factors determine a trader's salary?

It's hard to put a limit on a good trader's salary. To understand how a trader's remuneration can work, we need to consider the factors that determine it:

• Level of experience: a trader with experience in the profession is more likely to earn a good income. As a result, they are paid a higher salary.
• Specialisation: some traders specialise in a particular type of investment. This can enable them to stand out from the crowd and negotiate a more attractive salary from companies interested in their profile.
• Geographical location: although the salary of a French trader remains attractive, they are still paid less than their American, Belgian or Luxembourg counterparts. This difference is linked to the limits on bonuses, which are capped in France. Traders generally work in large cities close to major stock exchanges (Paris, New York, London, Tokyo, etc.).
• The types of financial products traded: the larger the portfolios entrusted to the trader, the greater the potential returns and the greater the rewards for risk-taking. Similarly, an independent trader can earn more if he invests a little more of his own capital in the stock market. They can also try riskier trades, which could bring big returns.

What are the average salaries of traders?

Estimates of the average salary of a trader are around :

• €4 000 to €6 000 euros gross per month as a beginner trader ;
• €5 000 to more than €10 000 gross per month as an experienced trader, to which you need to add bonuses, which can multiply your income by 8 (on average).

Some senior traders even manage to earn €200 000 a year excluding bonuses.

Brokers who work with traders are paid a fixed salary or commission on each transaction.

These indicative ranges may vary according to the many criteria we have mentioned. They obviously change depending on the employer, stock market fluctuations and the results achieved by the trader (target bonuses).

What studies do you need to become a trader and claim the best salaries?

A business school education is essential if you want to become a trader! Not only does it enable you to obtain a Bac +5, the minimum level of study required for most qualifications, it also enables you to follow a specialised course.

It is more than advisable to opt for business and management studies in finance. For example, you can take the following qualifications to follow this path and become a trader straight from business school:

• master in market finance;
• Grande École programme in English;
• IEP diploma (Institute of Political Studies) ;
• courses in financial techniques, money, finance and insurance, etc.

If you want to enter the job market with a solid background, consider the role of work placements in your course. They form the basis of practical experience for the development of your future career.

Even if the future trader is destined to work somewhere other than France, he or she can still take a master's degree in finance in France, which will be recognised internationally.

You can even go one step further and get a degree equivalent to a Master's degree with a specialisation in finance, banking, statistics or financial engineering.

What are the career and salary prospects for a trader?

A professional trader's career development depends partly on his experience and partly on his performance. The more the trader earns for his company, the more negotiating leeway he will have to increase his salary.

They will also earn more bonuses and can hope to progress to senior trader, portfolio manager or financial analyst. The senior trader will be able to give a company the benefit of his experience and will take on more responsibilities, managing large amounts or managing a team of junior traders.

The portfolio manager focuses on building investment portfolios.

A financial analyst is a specialist in financial analysis, whose main role is to act as a consultant and financial adviser to investors.

To achieve this, traders need to pay particular attention to their professional network and not neglect continuing training.

Being a trader is a fascinating job. Become a specialist in the financial markets and investments by studying at a business school. If you start out as a trader, you'll soon be able to look forward to an attractive salary and exciting career prospects. Contact our IPAG business school for more information about our finance courses.