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Discover The Day Trader's Trading Strategies
One investment opportunity that is much misunderstood is what is called day trading. It can be option day trading, or day trading for regular stock issues rather than options. Either way the name comes from the fact that the transactions take place ...
Stock Option Trading Guide for Beginner
There are four different types of players in the stock option trading game. They are buyers of calls, sellers of calls, buyers of puts, and seller of puts. The buyers are called holders, and the sellers are called writers. Buyers of calls are said to have ...
Getting Started In The Forex Market
The Forex market is known to be a very lucrative market, with trillions of dollars exchanged daily. To get started in the Forex market and make the most of your investments in it, you need to select a suitable broker. Forex brokers do not charge a ...
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Well, most people probably wouldn't put stock brokers up there with doctors and lawyers, but brokers do enjoy a high social status. This is one reason why a lot of young people today want to become stock brokers.
And while brokers don't have to go through years of medical or law school, they do face some rigorous examination.
Educational Requirements for Stock Brokers
Believe it or not, brokers aren't actually required to have college degrees. In practice, most stock brokers do have degrees in business, accounting, or finance, and most reputable brokerage firms require their brokers to have four-year degrees from institutions of higher learning.
Surprisingly, many stock brokers have degrees in non-business related subjects, such as psychology or engineering. In general, intelligence is a requisite for success, since good brokers must be able to understand the complexities of the financial markets and communicate with their affluent, well-educated clients.
Although college may not technically be required, every couple of years, stock brokers must take new classes to stay abreast of new financial products, and more importantly, new laws and regulations governing the markets. Brokers who fail to comply with these continuing educational requirements can have their stock brokers' licenses revoked.
The Dreaded Series 7
The most difficult challenge for most brokers is passing the Series 7 exam.
The Series 7 is a grueling, seven-hour test on a wide variety of topics. Officially, would-be stock brokers are supposed to study for eight weeks, but many brokerage firms rush their new hires into the test with as little as two weeks of study time.
A score of 70 percent is required to pass the Series 7, and a full one-third of test-takers fail. The average score for those who do pass is a lowly 73 percent - which doesn't reflect very well on brokers as professionals.
Topics Covered on the Series 7
The Series 7 manual is a 700+ page tome broken into 17 units. The first unit is on the basics of equity securities (stocks). Unit 2 is all about debt securities (bonds). Master these concepts and you're well on your way to passing the exam.
But Units 3 and 4 are most vital. They cover municipal bonds and options, respectively, and make up about 40 percent of the Series 7 exam. Be sure to master the various options strategies, such as straddles, collars, debit spreads, credit spreads, and the like.
Most of the remaining chapters are boring, even for stock market buffs, as they deal with rules, regulations, and procedures.
The topics include customer accounts, margin, issuing securities (i.e. the underwriting process), trading securities (i.e. technical stuff like computerized order routing), brokerage support services, investment company products (mutual funds, REITS, and unit trusts), retirement plans, variable annuities, direct participation plans, economics and analysis, ethics, U.S. government and state rules and regulations, and finally, other SEC and SRO (self-regulatory organizations) rules and regulations.
But That's Not All...
After passing the Series 7, new stock brokers are required to take additional tests. Although these tests are shorter and should be easier, new brokers are often unable to find time to study.
This is because most employers won't even let you start working until after you pass the Series 7 - which, by the way, you can't take unless you're "sponsored" by a brokerage firm - but you're expected to study for the Series 63 and other tests while working 10-12 hour days at your new job.
A career as a stock broker can be very challenging, but also very rewarding. Although as many as 90 percent of new brokers don't make it beyond their first year, those who stay in the business for at least three years make an average of more than $100,000.
Do you have what it takes?
William Smith the author provides much more financial information on many subjects as well as the secret to his success in the market along with 5 Free power stock picks emailed daily so grab your Free subscription on his website at Stock Brokers (All is Free)
Article Source: My Articles Directory
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