4 answers
Joshua
Student
Miami Gardens, Florida
13
Questions
Asked
524 views
how much math do you need to take to be a stockbroker?
#Math #stockbroker
Login to comment
4 answers
Andrew Au
Professor of Mathematics & Statistics, Retired
141
Answers
Updated
Andrew’s Answer
The answer to your question depends on your definition of a stockbroker.
If the task of a stockbroker is just to execute “buy”, “sell”, and ‘hold” options, no more than accounting math would be required.
However, if your vision of a stockbroker is in the capacity of a financial advisor, you will have to be able to perform investment analysis for your clients. At the minimum, you will need at least introductory statistics, the prerequisite of which is college algebra for many colleges.
In introductory statistics, you will learn how to collect, organize, visualize, and analyze data as well as perform inference to make decision based on the results. You can see that why statistics is important for investment advising.
If the task of a stockbroker is just to execute “buy”, “sell”, and ‘hold” options, no more than accounting math would be required.
However, if your vision of a stockbroker is in the capacity of a financial advisor, you will have to be able to perform investment analysis for your clients. At the minimum, you will need at least introductory statistics, the prerequisite of which is college algebra for many colleges.
In introductory statistics, you will learn how to collect, organize, visualize, and analyze data as well as perform inference to make decision based on the results. You can see that why statistics is important for investment advising.
Victor Yuditsky
Director of Analytics
21
Answers
Detroit, Michigan
Updated
Victor’s Answer
You need to understand math well but not to the extent of statistician or scientist. Ability to understand investments, work well with clients, keep ethical standards in high regard and understand economics are just as important.
Nicholas Leighton
Financial Advisor
5
Answers
Floral Park, New York
Updated
Nicholas’s Answer
Math is a very important subject and could be useful for any career. Stock brokers for the most part don't exist anymore because of the internet and ability for people to trade on their own. A good career path that's very similar would be a financial advisor. Most companies would look for at minimum a bachelors degree to hire you. Having a degree in business or finance would be helpful for this career path although not required. To answer your question, you don't need a lot of math just what's required to finish your degree.
Kellee Scott
Director, MBA Admissions at USC Marshall School of Business
23
Answers
Los Angeles, California
Updated
Kellee’s Answer
What a great question Joshua.
Considering how unpredictable and mysterious the stock market can be at times, it takes a brave risk-taker to enter the world of the stockbrokers. I have a business degree yet this was my weakest area. It's still a mystery to me how stock prices are determined. Kudos to you for considering this path.
You may have heard that the only real rule to profitability in stocks is to "buy low, sell high", which is essentially true, but how do you figure out the "present value" of the company whose stock you want to purchase? And how do you forecast the "future value" of the stock so you can decide whether it's worth buying in order to sell later at a profit? Math of course!
I've already given you two basic terms you'll find in a basic Finance 101 course book, PV: present value and FV: future value. Being knowledgeable about Finance and finance related math is what you need to work towards. Algebra and Statistics are great foundational courses to learn how to understand and interpret data. Then, you typically move on to basic Finance and Accounting to learn how companies are "valued" (get their stock price), based on revenue, cash flow, efficiency of operations, and so many other variables that I won't get into here. Finance and Accounting help you understand why a company is valued at a certain stock price versus others in their industry/function/global location.... Then you study the data (many variables can be involved), to determine if the stock price will go up or down. On a side note, factors like corporate culture and social "points" can affect a stock price, so if you can find a way to predict based on non-data variables, your personal stock price would go through the roof!
Stockbrokers also need certification by passing the Series 7 and Series 63 exams. The classes mentioned above are a great foundation to prepare you for the rigors of studying for these exams.
I hope this gives you a framework to begin your research. I highly encourage you to connect with an advisor at your school and chat about your interest in this area. They can help you plan a path of discovery as to whether being a stockbroker is something you should pursue.
While there is no exact science to predicting stock prices , the better you are at predicting outcomes and the more risk you are willing to take, the more potential for success you have in this field.
All the best to you!
Connect with an advisor
Find a way to meet a stockbroker and learn about what they do. Perhaps you'll gain a mentor.
If you haven't taken algebra yet, take it when you can to see if you even like working with "variables"
Considering how unpredictable and mysterious the stock market can be at times, it takes a brave risk-taker to enter the world of the stockbrokers. I have a business degree yet this was my weakest area. It's still a mystery to me how stock prices are determined. Kudos to you for considering this path.
You may have heard that the only real rule to profitability in stocks is to "buy low, sell high", which is essentially true, but how do you figure out the "present value" of the company whose stock you want to purchase? And how do you forecast the "future value" of the stock so you can decide whether it's worth buying in order to sell later at a profit? Math of course!
I've already given you two basic terms you'll find in a basic Finance 101 course book, PV: present value and FV: future value. Being knowledgeable about Finance and finance related math is what you need to work towards. Algebra and Statistics are great foundational courses to learn how to understand and interpret data. Then, you typically move on to basic Finance and Accounting to learn how companies are "valued" (get their stock price), based on revenue, cash flow, efficiency of operations, and so many other variables that I won't get into here. Finance and Accounting help you understand why a company is valued at a certain stock price versus others in their industry/function/global location.... Then you study the data (many variables can be involved), to determine if the stock price will go up or down. On a side note, factors like corporate culture and social "points" can affect a stock price, so if you can find a way to predict based on non-data variables, your personal stock price would go through the roof!
Stockbrokers also need certification by passing the Series 7 and Series 63 exams. The classes mentioned above are a great foundation to prepare you for the rigors of studying for these exams.
I hope this gives you a framework to begin your research. I highly encourage you to connect with an advisor at your school and chat about your interest in this area. They can help you plan a path of discovery as to whether being a stockbroker is something you should pursue.
While there is no exact science to predicting stock prices , the better you are at predicting outcomes and the more risk you are willing to take, the more potential for success you have in this field.
All the best to you!
Kellee recommends the following next steps: