A floor broker is someone who executes deals on the trading floor on behalf of clients of a firm, in contrast with a floor trader, who makes deals on his or her own behalf. These stock market professionals can work for firms of all sizes, and they may specialize in a particular type of commodity, or work more generally in a stock exchange. One of the advantages to working as a floor broker is that one is not exposed as directly to the risks of market volatility when a deal goes badly.
Also known as pit brokers, floor brokers receive orders from their firms and execute these orders on the floor. Their goal is to get the best deal, whether they are buying or selling, for the clients of the firm. Once the order is completed, it is recorded, and the client is informed that the deal has been successfully completed, and what the outcome was.
Working in a stock exchange can be extremely stressful and very hectic. Floor brokers need to be able to deal with a wide range of personalities, and to deal with a fast paced work environment. They also need to have some more basic skills, like the ability to clearly project their voices so that they can be heard over the din of the trading floor, and the aggressiveness to make a good trade and confirm it.
In order to become a floor broker, someone usually needs to pass an exam which allows him or her to join the exchange. Floor brokers are sponsored by their firms, and they work under the auspices of the companies which employ them, which means that when they make mistakes, the firm pays for them. These mistakes can vary from breaches of protocol which result in fines from the exchange, to a flubbed trade. Too many mistakes can get a floor broker fired, as firms are not interested in bearing expenses for their employees.
Every exchange has slightly different conventions and rules which floor brokers must become familiar with. Many exchanges have classes which are designed to familiarize people with life on the floor and the procedures that brokers and traders need to follow. These classes prepare people for the examinations they must take in order to work.
The level of education for a floor broker varies. Some have no advanced education, progressing on the basis of natural skills and the ability to work from the ground up. Others may hold college degrees in finance and related subjects.
