Best Degrees for Stock Trading
Aspiring stock traders are best served by obtaining a bachelor's degree in finance, mathematics, economics, business or a related field, while internships or advanced degrees will give them an advantage over their competitors.
What Degree Level Is Required?
While most entry-level stock trading positions expect applicants to hold a bachelor's degree, more advanced positions often require a master's degree. Stock traders hoping to advance to a managerial position would do well to obtain a Master of Business Administration (MBA). There are also Ph.D. programs available, but these are most often geared toward aspiring academics.
|Degree Level||Bachelor's degree; master's degree for advancement|
|Required Skills||Macroeconomics, statistics, advanced mathematics, risk management, computer programming, stock market knowledge|
|Degree Focus||Economics, business, finance, business administration, mathematics, financial engineering, statistics|
|Median Annual Salary (2018) and Projected Job Growth (2016-2026)||$64,120; 6% increase (for securities, commodities and financial services sales agents)*|
Source: *U.S. Bureau of Labor Statistics
What Skills Do Stock Traders Need?
An entry-level trader is usually required to manage and price certain trades, generate stock market ideas and communicate with clients. As traders become more experienced, they are expected to demonstrate a variety of skills and abilities, including:
- Ability to evaluate macroeconomic trends
- Statistical analysis
- Mathematical abilities, including stochastic calculus
- Hedging strategies and other risk management skills
- Transactional knowledge of derivatives, options, futures, currencies, interest rates and other financial instruments
These skills can be obtained through on-the-job training, internships, work experience at a financial company or more advanced coursework.
What Degree Focus Is Most Relevant?
Bachelor's and master's degrees that are useful to aspiring stock traders include those with a focus on finance, mathematics, economics, business, financial engineering, computer science and statistics. Summer internships, which are offered by many financial companies, can greatly enhance the employability of candidates from any degree background by providing them with practical experience.
There are some advanced degrees specifically geared toward aspiring financial professionals or those who may already be working as stock traders, such as a Master of Science in Financial Management, Master of Science in Finance & Risk Management or Master of Science in Computational Finance. These programs can prepare students to understand investment management strategies; develop mathematical and computational skills; and understand the basics of debt, equity and derivatives securities.
For managerial-level positions, employers will often look kindly on applicants who have completed an MBA.
What Stock Trading Jobs Are Available?
Stock traders can work for large banks, brokerages or hedge funds. Some individuals choose to become independent day traders, though this is widely considered a high-risk endeavor. Stock traders typically work long hours in high-stress environments.
Prior to obtaining a job with a U.S. financial company, stock traders are required to become licensed as General Securities Representatives through the Financial Industry Regulatory Authority. In order to do so, candidates must already be sponsored by a member firm, and they must pass the Security Industry Essentials (SIE) and Series 7 exams to demonstrate their competency in selling various kinds of securities.
Securities, commodities and financial services sales agents earned a median annual salary of $64,120 in 2018, according to the U.S. Bureau of Labor Statistics. The same agency projected that the occupation will experience 6% job growth from 2016 to 2026 - about the same as the average across industries.