Learn something new every day
More Info... by email
A floor trader is someone who is a member of a stock exchange, and trades for their own account, instead of for others. They are also sometimes called registered competitive traders, liquidity providers, and locals. Becoming a floor trader is risky, and not for the weak of heart. Because you are using your own money on the stock market, it is easy to see great gains or great losses throughout the course of a single day.
To become a floor trader, you should first attend college and earn a business degree. A bachelor’s degree would be fine, but you are better off with a master’s degree. Spend time studying fundamental analysis, and other courses that will be of assistance to you in your career. A higher degree may give you a slight edge over other floor traders. The more you know about how the stock exchange works, the better you will be able to do as a floor trader.
After completing a degree, the next step is to get experience in the stock exchange. It is a very fast-paced, competitive career field. Getting a feel for how it works, before you set out on your own, is essential to being able to do well. Working for a brokerage is one way to get an idea of how the system operates. After some time there, look for work as a clerk. A clerk is someone who does the exact same work of a floor trader, but for another person. This is a great way to really get the hang of what you will be doing every day as a floor trader.
While working for others, it is time to begin saving for an exchange membership. These memberships are necessary for being able to trade on the exchange floor, and they are very expensive. On the New York Stock Exchange (NYSE) seats sell for around two million US Dollars (USD). An annual membership for the Chicago Stock Exchange costs around $7,000 USD, not counting other fees that may apply. For a cheaper option, it is possible to lease a membership temporarily, but you will still eventually need your own.
Once you have bought a seat for a stock exchange, you are able to go out onto the floor to begin your career as a floor trader. Using the information and experience you have gained along the way, it is possible to earn a lot of money in your new profession. With success, it is possible to enjoy an early retirement, spent sailing around the world in your new yacht or visiting far-off countries in your private jet. Good luck!
One of our editors will review your suggestion and make changes if warranted. Note that depending on the number of suggestions we receive, this can take anywhere from a few hours to a few days. Thank you for helping to improve wiseGEEK!