A junior trader is someone who works for a private equity firm or an investment bank. Many of them are in charge of evaluating potential investment opportunities and assisting senior traders with trade execution. A junior trader’s responsibilities also include tracking and reporting trades and price changes on a specific investment. An aspiring trader may decide to trade his or her own capital first, rather than working for a prestigious investment bank, in order to establish a positive trading record.
Many investment banks will give junior traders the opportunity to present the firm’s investment strategy to potential investors as part of their training. The trader’s presentation skills will enable him or her to gain a better understanding of the firm’s core business model. The trader will often be responsible for trading a small amount of investment capital in addition to presenting to investors. Senior traders usually keep an eye on the trader’s actions and assist him or her in carrying out the firm’s investment strategies. A junior trader may be promoted to the ranks of senior trader after establishing a successful trading record.
The competition to become a junior trader is fierce, and anyone interested in working for an investment firm will need a formal education. A bachelor’s degree in business, finance, mathematics, or accounting is required for most traders. Individuals with a master’s degree in business administration are more likely to pursue additional financial certifications and licenses as they work their way up the corporate ladder. Because of the industry’s competitiveness, it is always advisable for aspiring traders to continue to expand their subject knowledge and credentials.
A person who wants to work as a junior trader must be able to learn and internalize a wide range of trading strategies and asset classes. Although a junior trader can start their career in a variety of asset classes, such as equities, commodities, or currency, there are a variety of trading mechanisms available in the marketplace, including options, futures contracts, and much more. Initially, a trader will be trained in the asset class that best meets the firm’s needs, but many traders eventually develop their own trading strategies and incorporate them into their daily routine. This can be extremely beneficial to successful traders, as the amount of profit generated through their trading activities directly affects their income.