To gain a foothold in trading in the stock exchange, which business degree should one get?

Question

-State specifically the kind of degree

-Provide details of the relevance/non-relevance of the degrees

Answer 1

Any BS in Business will do.  To be a registered representative, the basic "broker", you need a Series 7, and most states will require a Series 63. There are other, dumbed-down certifications but the 7 is what everybody goes for because it basically allows you to sell any type of product to any type of customer. At this level you're basically a sales rep for a broker/dealer (the company). You can call customers, do sales visits, open accounts, provide some levels of advice, etc.

If you actually want to trade, you will probably need a Series 55. Other certifications allow you to be an investment advisor, run a branch office, and so on. The certifications are required by most SROs (Self-Regulatory Organizations, such as NASD and NYSE) for employees of their member firms. There's no loophole if you don't have a firm, because only a registered broker/dealer can employ registered reps and the other levels of staff.

Getting the certification isn't easy. You aren't allowed to take the test unless you have a sponsor, which basically means a broker/dealer who takes you under their wing. The thing is, the sponsor is basically saying to NASD/NYSE that they're not just helping you, they're actually overseeing you - they're responsible for your actions, even outside the firm (to some large extent). Unless you have a buddy in the business (in which case s/he's either already told you this, or isn't the right buddy) you won't find some random firm willing to sponsor you - you have to work for their company. Some even require contracts. If you're looking for a loophole, look for day trading firms, which treat their "employees" as "customers" and will sponsor you if you're serious (which usually means $15k-$50k or more cash on the barrel to open a real trading account).

Note that you have to keep current. Within two years after leaving a broker/dealer, if you don't associate with a new one (become employed by one) you lose your certification. You may not do business using your registered rep status during this time, either. The idea here is that the broker/dealers are where all the regulation in the industry is done, and they're supposed to monitor what you're doing. Just because you're certified doesn't mean the NASD is happy with you, but they don't have the time or resources (or give-a-hoot) to monitor individuals, so they monitor firms and require the firms to monitor individuals. You also have to do continuing education every 2/3 years depending on how long you've had your 7 and other certs.

Once you find a sponsor the job isn't done. You have to actually take and pass the test, which is a 6-hour long exam. If you have any exposure to the market ahead of time this isn't always that hard, but for some who are changing industries expect to spend a great deal of time studying. It's widely considered a challenging test, and is designed to unnerve you a bit - the questions get harder as you go through the exam (deliberately). Fortunately, there are many exam prep books (some better than others - I prefer Dearborn/Kaplan) and test software packages. I highly recommend the software - most of them have pretty (terrible) user interfaces, but since their questions are usually drawn from actual test questions, you'll often find in the exam that some of the questions on the test are things you've seen before.

Answer 2

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