Bond Trader: Buying and Selling Bonds for a Living

As the pit trader disappears, the math expert rises

Bond trading and clock in the foreground
••• Westend61 / Getty Images

Back in the day and not all that long ago, there was a lot of screaming, a great deal of pushing, and no small amount of shoving in the trading pits. Sometimes actual fistfights would break out. Hyper-looking people in strange, multicolored jackets used elaborate hand gestures indicating buy and sell signals. It was something like a bizarre circus with a language all its own. 

The trading world is considerably calmer these days. Although there are still trading pits, most of the investment world has moved to more sedate, computer-based trading systems. The larger-than-life characters who made a living screaming, shoving, and trading are fading into history. There's a whole new world of bond traders out there.

Do you have what it takes to wade in and tackle buying and selling bonds for a living?

Becoming a Bond Trader: The New Breed

Careers in bond trading can be enormously rewarding from a financial perspective so competition for these jobs at the giant investment banks and at other financial institutions is fierce. And a new personality style is winning these prized jobs these days. 

"It used to be that the prerequisite to trade bonds on Wall Street was being a lacrosse player," according to Paul Calvetti, then head of Deutsche Bank AG's government bond desk told Bloomberg News. "The prerequisite now is to have a quantitative, analytical background. Without those skills, trading can be like trying to be a carpenter without a hammer."

What Skills and Education Do You Need?

The odds are strong that you can get an interview with one of the major financial institutions that hire bond traders if you have strong math skills, a strong personality, and a degree from a top-tier school.

Make plans now to meet with a Wall Street recruiter if you're still in school, particularly in a good school that offers strong programs in business, math, or physics. There's a strong chance that a few of them will be recruiting on your campus.

Start searching for trading jobs on e-Financial Careers and if you already have your degree.

You might be required to take and pass the General Securities Representative Exam, sometimes referred to as the Series 7 exam. It's mandatory before you can buy and sell securities and you'll need the sponsorship of a firm behind you to qualify to take it. Some states require additional exams and certifications.