REAL WORLD

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Becoming A Professional Stock Trader

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by Don Bright

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Are you interested in taking the plunge? Here are some of the things that you should know.

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It's important to identify the differences between professional trading and retail trading, particularly the need for Series 7 licensing. A couple of years ago, the powers that be decided that to protect both the public and professional traders, a method of distinguishing between the two had to be put into place. After much ado, the Securities and Exchange Commission (SEC) determined that an industry-wide exam would be utilized for the distinction.

Recall, too, the major advantages of becoming a professional trader with a member firm of an exchange: the use of others' capital, the elimination of ticket charges along with the lower overall costs make it a different world than is offered to the retail customer of a brokerage firm. These differences directly affect your bottom line to such an extent that in most cases it makes the difference between profit and loss (yes, most cases).

Update 2007: Click here for steps to  becoming a professional trader.

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Don Bright is with Bright Trading (www.stocktrading.com), a professional equity corporation with offices around the US.
 

Excerpted from an article originally published in the June 2001 issue of Technical Analysis of STOCKS & COMMODITIES magazine. All rights reserved. © Copyright 2001, Technical Analysis, Inc.

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