A Day in the Life of a City Trader

A Day in the Life of a City Trader

A day in the life of a City trader

The London Stock Exchange is only open for eight and a half hours each day, from 8.00am to 4.30pm, but the typical working day for a City trader might be anything between 12 and 16 hours, and a 6.00 am start to the working day is not uncommon.

A trader may spend the early morning checking financial news sites for any overnight developments. Then before the markets open at 8.00 am, traders may attend team meetings at which the previous day’s trading activity is reviewed and plans are made for what transactions will be conducted in the day ahead.

During the day, traders usually continue to monitor the news closely, especially anything that could affect currency movements or the prices of shares, commodities or bonds. City research analysts can provide invaluable assistance to traders – they monitor market data and advise traders on the best course of action according to that data.

Traders are generally looking to make profits by buying and selling different world currencies at the right times. They also take ‘trading positions’, which are essentially bets, on movements in the prices of bonds, shares, commodities and currencies. This is often done via a ‘futures contract’, where a trader undertakes to buy or sell a product at a set price at a fixed time.

For example, if the oil price is currently $45 a barrel, a trader could promise to buy at that price of $45 in three months time. If the price rises to $60 then they have made a profit of 33%. But if the price falls to $30 then they have lost 50%.

Some traders suggest there is a lull in activity between 12 noon and 2.00 pm, and that lunch need not always be a five-minute meal, eaten at your desk. Otherwise, outside of these periods, many traders report feeling uncomfortable if they take even a very short break to get a coffee or answer a call of nature, fearing that they may miss an important opportunity.

The afternoon session may be even more hectic than the morning, as this is the time of day that the US markets and the major European markets are all open simultaneously.

Companies will typically monitor the activities of their traders and advise them if their positions are unduly risky.

After the trading day has finished, a trader may review their activity, estimate their profit/loss for the day and re-assess their risk position. If meetings with clients are required, they often take place at this time of day.

While eventually a trader’s official work will be done for the day, many traders say they cannot relax during the evenings and spend their time constantly checking the financial news sites.

The average annual salary for a City trader is reported to be £62,500. The best traders can make tens of millions of pounds for their companies each year and augment their salary with considerable bonuses – it is not uncommon for an experienced trader to earn £600,000 in total. However, even a single transaction that goes badly wrong can destroy a trader’s reputation.

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