We are independent & ad-supported. We may earn a commission for purchases made through our links.
Advertiser Disclosure
Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.
How We Make Money
We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently of our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.

What does a Stock Trader do?

By N.M. Shanley
Updated Feb 20, 2024
Our promise to you
WiseGeek is dedicated to creating trustworthy, high-quality content that always prioritizes transparency, integrity, and inclusivity above all else. Our ensure that our content creation and review process includes rigorous fact-checking, evidence-based, and continual updates to ensure accuracy and reliability.

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

Editorial Standards

At WiseGeek, we are committed to creating content that you can trust. Our editorial process is designed to ensure that every piece of content we publish is accurate, reliable, and informative.

Our team of experienced writers and editors follows a strict set of guidelines to ensure the highest quality content. We conduct thorough research, fact-check all information, and rely on credible sources to back up our claims. Our content is reviewed by subject-matter experts to ensure accuracy and clarity.

We believe in transparency and maintain editorial independence from our advertisers. Our team does not receive direct compensation from advertisers, allowing us to create unbiased content that prioritizes your interests.

A stock trader is a person who buys and sells securities on a stock exchange. Common types of traders include individual investors, professional money managers, and floor traders. Most stock traders work from home or an office, making trades over the phone or the Internet. Floor traders typically work on the actual stock exchange floor.

An individual stock trader buys and sells stocks, options, and futures to build a personal portfolio. Since there are so many individual investors, trades are usually completed through a broker. Many personal investors use online brokers. Investors who use online brokers usually place trade orders on the Internet. Generally, these investors are doing their own research and making trading decisions without the help of a professional money manager.

Since this type of stock trader is not making the actual trades, no professional license is required. Almost anyone can open an online brokerage account. These investors typically need to make a minimum opening deposit to start an online investment account.

An investor may also choose to hire a professional money manager to control their stock portfolio and make trades. Professional money managers are also known as investment consultants, investment managers, stock brokers, and wealth management consultants. In the United States, professional money managers are licensed by the Federal Industry Regulation Authority (FINRA) to make trades and handle money for their clients. These managers also use brokers to carry out trade orders.

Brokers are also licensed by FINRA, and usually combine buy and sell orders from all of their customers. These orders are then passed on to a floor stock trader. This trader fulfills the orders on the stock exchange floor in an auction format. Floor traders can also send trade orders to the auction floor electronically to be carried out by a stock exchange employee.

Floor traders work for companies that have one or more seats on a stock exchange. These professionals must obtain a trading licenses, usually through the exchange itself. Floor trading is a highly competitive, fast-paced, and stressful job.

Stock trading is regulated by the Securities and Exchange Commissison (SEC). Any licensed stock trader who breaks SEC or FINRA rules, or is found guilty of a crime involving securities, can lose his or her trading license. This revocation can prohibit the person from trading stocks for a certain period of time, or permanently, depending on the severity of the offense. In addition to losing the trading license, the offender will most likely have to pay a heavy fine.

WiseGeek is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Link to Sources
Discussion Comments
WiseGeek, in your inbox

Our latest articles, guides, and more, delivered daily.

WiseGeek, in your inbox

Our latest articles, guides, and more, delivered daily.