Full time Option trader

[jet-r]

I recently saw a job ad for graduate derivative traders, it sounds very interesting and seems to be a highly paid job.

Does anyone here know whats like to be a full time option trader? how stressful is the job? any good or bad things about being a trader as a career.

 

[happytrader]

Hi jet-r

What an excellent job if all you have to do is follow someone elses system with someone elses money. If your only responsibility is to do what you are told, I can't see much of a stress factor other than boredom. A trader who can be replied upon to follow instructions would be the closest thing to getting a robot to do the job. Sounds like a license to print money. Thats probably why the pay is so good.

Cheers
Happytrader

 

[Realist]

Sounds pretty boring actually.

What is the pay?

What would you be doing 10 years down the track?

Always look for a career not just a job if you know what I mean.

 

[jet-r]

It would be a career change for me as I have already done years of accounting. I heard the burn out rate for that job is very high. Thats probably they want young grads who can take the hit. That reminds me of high stress jobs like investment bankers, who get high base salary and minimium of 50% bonus.

 

[wayneL]

I recently saw a job ad for graduate derivative traders, it sounds very interesting and seems to be a highly paid job.

Does anyone here know whats like to be a full time option trader? how stressful is the job? any good or bad things about being a trader as a career.

By trader, do you mean you would be working as a market maker?

Cause that is high stress for some personality types and *highly* mathematical.

Some cope quite well.

 

[wayneL]

I once took a test they use to screen out all but those with Einsteinian type brains. (This was for market makers)

Ahahahahaha, it blew the top of my head off. I went away very humbled.

Cheers

 

[Magdoran]

I recently saw a job ad for graduate derivative traders, it sounds very interesting and seems to be a highly paid job.

Does anyone here know whats like to be a full time option trader? how stressful is the job? any good or bad things about being a trader as a career.

Hi jet-r,


This kind of role could vary widely - remember the NAB options traders who faced court recently - that is one example - some roles involve hedging, some are speculative, as Wayne says there are market making roles, there are floor traders in exchanges, the list goes on...

Most of these require qualifications in derivatives, often some kind of license if required, and a working knowledge of the market you are to operate in would be advantageous.

Have a read of Brian Price's comment in "Masters of the Market" by Hughes, Wilson and Kidman. This will give you an idea of how aggressive floor traders can be.


Regards


Magdoran

 

[Realist]

I once took a test they use to screen out all but those with Einsteinian type brains. (This was for market makers)

Ahahahahaha, it blew the top of my head off. I went away very humbled.

Cheers

Sounds interesting, can you remember any of the questions??

 

[wayneL]

Sounds interesting, can you remember any of the questions??

They were basically mathemetical problems. It's not that I wasn't able to solve them, it was the time give... a matter of seconds, so they had to be done in your head very quickly.

I can see why. A market maker has to make split second decisions with a mere few seconds time frame, with great gobs of cash on the line and it's all mathematical.

We retail traders can sit and fiddle with payoff diagrams, work out our sums, wait for a move, whatever, or decide not to trade that day.

It is a different world altogether. The market maker prime goal is to get FLAT with an arbitrage profit in hand.

 

[jet-r]

Sounds interesting, can you remember any of the questions??

Guys I've found a simulation test for those insane interview questionaries. I only managed to score 20%....

http://optiver.com/pages/workingwithus/testme.asp

 

[spitrader1]

Hi jet-r

What an excellent job if all you have to do is follow someone elses system with someone elses money. If your only responsibility is to do what you are told, I can't see much of a stress factor other than boredom. A trader who can be replied upon to follow instructions would be the closest thing to getting a robot to do the job. Sounds like a license to print money. Thats probably why the pay is so good.

Cheers
Happytrader

only someone who has no idea would write this....you do not follow someone elses system. yes you have guidance from a senior trader and you are required to use there black box, but at the end of the day you have to make the decisions on youre big positions...and if you dont make money, then you dont get payed....in no way is MM'ng a licence to print money. Boredom-HAHAHAHAH....how does managing ure greeks on a 20 million dollar portfolio sound, working 7am untill 7pm every day, and knowing that coming into the stocks dividend time 2 cents either could make you or break you for the month....

 

[spitrader1]

They were basically mathemetical problems. It's not that I wasn't able to solve them, it was the time give... a matter of seconds, so they had to be done in your head very quickly.

I can see why. A market maker has to make split second decisions with a mere few seconds time frame, with great gobs of cash on the line and it's all mathematical.

We retail traders can sit and fiddle with payoff diagrams, work out our sums, wait for a move, whatever, or decide not to trade that day.

It is a different world altogether. The market maker prime goal is to get FLAT with an arbitrage profit in hand.

Exactly wayne.....the questions might not seem that difficult when sitting home with 20 minutes spare, but when u are caught short in a moving market with 3 phones ringing and some broker annoying you asking you for a qoute on a 3 legged spread, even though you might have a machine, trust me, it aint that easy.

 

[swingstar]

What's the typical salary for MMs?

Sounds like a lot of effort.

 

[spitrader1]

What's the typical salary for MMs?

Sounds like a lot of effort.

swingstar that is a hard question....a grad who is in his first year trading small cap stocks may get 75-80 with a 15, 20 bonus. it all depends on if you make money or not. it tends to be if you make alot of cash you will either run the MM desk or move on to a soley cash trader. you have to remember traders get payed ususally over 50% of there years pay in a bonus.

 

[happytrader]

only someone who has no idea would write this....you do not follow someone elses system. yes you have guidance from a senior trader and you are required to use there black box, but at the end of the day you have to make the decisions on youre big positions...and if you dont make money, then you dont get payed....in no way is MM'ng a licence to print money. Boredom-HAHAHAHAH....how does managing ure greeks on a 20 million dollar portfolio sound, working 7am untill 7pm every day, and knowing that coming into the stocks dividend time 2 cents either could make you or break you for the month....

Hi Spitrader1

You're comments are duly acknowledged. However, I would quite happily hire an obedient option trader who has no qualms with following my system anyday over someone with all the right bits of paper and the wrong attitude.

I am also quite sure that there are little groups of these quiet achievers around the traps already hitting the markets. They could well be those teenage nerds across the street.

Cheers
Happytrader

 

[spitrader1]

Hi Spitrader1

You're comments are duly acknowledged. However, I would quite happily hire an obedient option trader who has no qualms with following my system anyday over someone with all the right bits of paper and the wrong attitude.

I am also quite sure that there are little groups of these quiet achievers around the traps already hitting the markets. They could well be those teenage nerds across the street.

Cheers
Happytrader

the point is there is no point in just hiring someone to follow a system. MM's dont just input levels and off they go. They make trading decisions just like you and I. THeres no such thing as obedient option trader becuase everyone, no matter what level they are, have to make critical trading decisions at some point. Teenage nerds across the street, well maybe, the likes of optiva have already proved that MM'ng has changed, you dont have to have the contacts and relationships once required in trading to make money.

 

[jet-r]

Surely, there must be certain policy and procedures to follow. You still need to make your calculations and judgements to trade. from what I have heard, you will have about 3-4 screens to look at simulaniously, you are required to be fully focused when the market is opened. these ppl pull around 70k base plus 50%+ bonus. Its abit like Investment bankers.

 

[spitrader1]

Surely, there must be certain policy and procedures to follow. You still need to make your calculations and judgements to trade. from what I have heard, you will have about 3-4 screens to look at simulaniously, you are required to be fully focused when the market is opened. these ppl pull around 70k base plus 50%+ bonus. Its abit like Investment bankers.

there are procedure to follow as in you input levels into a machine and it tells you roughly wat ure bid offer should be but at the end of the day the MM still has to come up with the price, and 90% of the time its not what the machine tells you. yes you are required to be focused 100% of the time when the market is open and yes, for a juinor MM that is about the cash...but you can forget the bonus if you dont make money

 

[wayneL]

Guys I've found a simulation test for those insane interview questionaries. I only managed to score 20%....

http://optiver.com/pages/workingwithus/testme.asp

Obviously no-one has scored much better otherwise they would have posted.

I did shockingly bad as well - 30%... its the pressure of the time Ahhhh!

 

[ice]

One of life's little ironies.

I find those questions childishly simple but cannot for the life of me remember people's names even 10 minutes after I've been introduced.
Believe me, that's more important out in the real world.


ice