How to Become a Bond Trader

Buy strength and sell weakness

Being a bond trader today is different from the days when traders had a "feel for the market." Today's traders have advanced degrees, use sophisticated modeling techniques, have great drive and can multitask to provide the company and customers with efficient decision making. Getting a job is a function of your academic success, your personality and your ability to ask impressive credentials.

Step 1

Demonstrate a solid record of achievement in scholastic studies and people skills. Traders must interact with customers and salesmen as well as management. Traders must demonstrate a high level of intellectual capacity, especially in math and the sciences, since bond prices and bond-spread relationships are mathematically determined. Bachelor's degrees are minimal requirements. Advanced degrees in law, master's degrees in business administration, or master's or doctorates in science or mathematics are preferable.

Step 2

Prove your people skills by handling advanced mathematical problems under intense pressure while working with other traders and customers. Traders can be responsible for decision making involving hundreds of millions of bonds that can easily vary in price by several million dollars in a few minutes. Executing a trade under market uncertainty requires skill and patience.

Step 3

Use scholastic achievements and other awards to show that you can think and act with determination and are not easily put off by problems. Traders embrace problems that constantly call for quick decision making and an ability to combine the interests of buyer and seller. Many of these skills are learned and refined on the job. Related prior experience, even summer jobs is a plus. Try to learn as much about trading as possible. You can only be judged by your history and the quality of the questions you ask.

Step 4

Join finance clubs that write on investment topics and hold business forums. Apply for internships during summer breaks to gain experience. Use family contacts or just write directly to investment firms that you have studied and ask for interviews. Bond firms respect tenacity.

Tip

These jobs are extraordinarily profitable, but there are few of them. There are alternatives such as bond salesman, credit analyst and money manager that are less stressful and can be equally lucrative. There is no clear-cut path other than superior academic credentials, a history of success, tenacity and an ability to work well with others under pressure. Brokers look at the whole composition of the individual and judge their ability to trade. It is very expensive for the trader and the firm if their judgment is not correct. Try to spend a day on a trading desk even if at the local brokerage office. Imagine a career basically spent at a desk on the telephone.

Warning

Never try to impress recruiters by telling them of your personal trading experience. It shows immaturity and failure to recognize that personal and brokerage trading are very different.

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