Options traders are financial experts who work for large investment banks or private hedge fund companies to buy and sell stock options as well as manage complex capital investments for clients. These traders are required to create options contracts and develop forecasting models so that they can determine the optimal price to buy an option to maximize profit and minimize risk. They must assist head traders with client services to allow more trading revenue production. Options traders must also employ risk management strategies to minimize portfolio risk and increase their volume in trading.
Options trader responsibilities
Here are examples of responsibilities from real options trader resumes:
- Enact, and manage equity block desk operation and set up floor broker network on NYSE.
- Create VBA applications to automate basic trading functions and administration functions such as reorganization tenders and trade pricing issues.
- Manage business, sales, marketing, international negotiation and communication for a commodities business.
- Trade options profitably on screen markets and trade complex option spreads via telephone brokers at the CBOE and CME.
- Experience in communicating and executing derivative arbitrage opportunities, as well as communicating and executing trades fitting against an option position.
- Research the SPX, DOW, and NASDAQ.
- Promote to trade U.S. treasury futures and grain spreads.
- Trade coffee, cocoa and Euro FX futures and options for own account.
- Trade hundreds of NYSE list stocks, learned tape reading and analyze each stock's movement.
- Collaborate with technology team to improve software used to send orders and markets to ISE exchange.
- Import historical data from Bloomberg into proprietary database, forecast price levels, present recommendation to team.
- Make markets for all brokers in the pit, and on the screen using Bloomberg and squawk boxes.
- Prepare pricing models and analyze the risk of the ETF business on a daily basis and for each individual trade.
- Implement trading strategies that are used to execute trades base on commodity futures, FOREX, equities, options and bonds.
- Execute domestic/global equities securities for multiple product lines with minimal market impact.
Options trader skills and personality traits
We calculated that 32% of Options Traders are proficient in FX, Stock Options, and Equities. They’re also known for soft skills such as Analytical skills, Customer-service skills, and Detail oriented.
We break down the percentage of Options Traders that have these skills listed on their resume here:
- FX, 32%
Established Consolidated in FX Pit with a team of two; Highest grossing FX Options trading team at Consolidated.
- Stock Options, 17%
Executed stock option equity trades for international executives.
- Equities, 11%
Executed domestic/global equities securities for multiple product lines with minimal market impact.
- Stock Market, 5%
Analyzed the stock market with a focus on implementing stock option positions for profit based on projected market changes.
- Risk Management Strategies, 3%
Advised upstream and downstream clients on hedging and risk management strategies in soft commodity space.
- Equity Options, 3%
Traded equity options for this proprietary derivatives trading firm.
"fx," "stock options," and "equities" are among the most common skills that options traders use at work. You can find even more options trader responsibilities below, including:
The three companies that hire the most options traders are:
- DTE Energy2 options traders jobs
- Belvedere Trading2 options traders jobs
- Intercontinental Exchange1 options traders jobs
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Options trader vs. Commodity broker
The foreign exchange market is volatile and influenced by numerous factors. A foreign exchange trader considers these factors and utilizes them in their favor. They typically take care to predict misvaluations of currencies accurately. They act on the conclusions reached from their analysis and either buy or sell assets in different markets. This position requires diligence and patience.
The annual salary of commodity brokers is $46,822 lower than the average salary of options traders.
While the two careers have a salary gap, they share some of the same responsibilities. Employees in both options trader and commodity broker positions are skilled in equities, derivative, and financial markets.
These skill sets are where the common ground ends though. The responsibilities of an options trader are more likely to require skills like "fx," "training programs," "stock options," and "stock market." On the other hand, a job as a commodity broker requires skills like "commodities," "market analysis," "risk management," and "client accounts." As you can see, what employees do in each career varies considerably.
Commodity brokers really shine in the finance industry with an average salary of $89,520. Comparatively, options traders tend to make the most money in the finance industry with an average salary of $118,188.
Commodity brokers tend to reach similar levels of education than options traders. In fact, commodity brokers are 3.0% less likely to graduate with a Master's Degree and 0.1% more likely to have a Doctoral Degree.
Options trader vs. Foreign exchange trader
A Hedge Fund Trader specializes in developing investment strategies through market research and analysis. Although the extent of their duties depends on their company of employment, it typically includes managing and monitoring market portfolios, trading according to policies and regulations, reaching out to potential business partners through calls and correspondence, discussing terms, and keeping an eye on stock prices. A Hedge Fund Trader must maintain an active communication line with staff for an efficient and fruitful workflow.
A career as a foreign exchange trader brings a higher average salary when compared to the average annual salary of an options trader. In fact, foreign exchange traders salary is $4,994 higher than the salary of options traders per year.
While the salary may differ for these jobs, they share a few skills needed to perform their duties. Based on resume data, both options traders and foreign exchange traders have skills such as "equities," "derivative," and "technical analysis. "
In addition to the difference in salary, there are some other key differences worth noting. For example, options trader responsibilities are more likely to require skills like "fx," "training programs," "stock options," and "stock market." Meanwhile, a foreign exchange trader has duties that require skills in areas such as "manage risk," "foreign exchange products," "foreign currency transactions," and "swaps." These differences highlight just how different the day-to-day in each role looks.
Foreign exchange traders may earn a higher salary than options traders, but foreign exchange traders earn the most pay in the finance industry with an average salary of $118,788. On the other hand, options traders receive higher pay in the finance industry, where they earn an average salary of $118,188.
In general, foreign exchange traders achieve similar levels of education than options traders. They're 3.3% more likely to obtain a Master's Degree while being 0.1% less likely to earn a Doctoral Degree.
Options trader vs. Energy derivatives trader
On average scale, energy derivatives traders bring in higher salaries than options traders. In fact, they earn a $7,331 higher salary per year.
Using the responsibilities included on options traders and energy derivatives traders resumes, we found that both professions have similar skill requirements, such as "equities," "equity options," and "derivative.rdquo;
Some important key differences between the two careers include a few of the skills necessary to fulfill the responsibilities of each. Some examples from options trader resumes include skills like "fx," "training programs," "stock options," and "stock market," whereas an energy derivatives trader is more likely to list skills in "futures contracts," "interest rates," "fixed income," and "foreign exchange. "
Energy derivatives traders make a very good living in the agriculture industry with an average annual salary of $116,251. On the other hand, options traders are paid the highest salary in the finance industry, with average annual pay of $118,188.
When it comes to education, energy derivatives traders tend to earn higher degree levels compared to options traders. In fact, they're 7.6% more likely to earn a Master's Degree, and 0.4% more likely to graduate with a Doctoral Degree.
Options trader vs. Hedge fund trader
Hedge fund traders tend to earn a higher pay than options traders by an average of $7,410 per year.
According to resumes from options traders and hedge fund traders, some of the skills necessary to complete the responsibilities of each role are similar. These skills include "equities," "derivative," and "technical analysis. "
Each job also requires different skills to carry out their responsibilities. An options trader uses "fx," "training programs," "stock options," and "stock market." Hedge fund traders are more likely to have duties that require skills in "macro," "fixed income," "inbound calls," and "asset management. "
Hedge fund traders reach similar levels of education compared to options traders, in general. The difference is that they're 2.5% more likely to earn a Master's Degree, and 0.8% less likely to graduate with a Doctoral Degree.
Types of options trader
Trader
Average Salary: $90,179
Bachelor's Degree
Available Jobs: 7,025
How To Become a Trader
Equity Trader
Average Salary: $101,759
Bachelor's Degree
Available Jobs: 2,687
How To Become an Equity Trader
Commodity Trader
Average Salary: $93,220
Bachelor's Degree
Available Jobs: 686
Energy Derivatives Trader
Average Salary: $117,470
Bachelor's Degree
Available Jobs: 311
Hedge Fund Trader
Average Salary: $117,549
Bachelor's Degree
Available Jobs: 243
How To Become a Hedge Fund Trader
Forex Trader
Average Salary: $115,092
Bachelor's Degree
Available Jobs: 226
What Similar Roles Do
Related Job Descriptions
Options Trader Related Jobs
What Similar Roles Do
As a seasoned financial expert with a comprehensive understanding of options trading, I've spent years immersed in the intricate dynamics of financial markets, specializing in the domain of options trading. My expertise is underscored by a track record of successfully executing complex option strategies, managing portfolios, and implementing risk management protocols.
In the realm of options trading, proficiency in various skills is crucial for success. Let's dissect the key concepts mentioned in the article and provide additional insights:
1. Options Traders' Responsibilities:
a. Equity Block Desk Operation:
- Enacting and managing equity block desk operations involve overseeing large equity transactions. This requires a deep understanding of market dynamics and execution strategies.
b. VBA Applications for Automation:
- Creating VBA applications for trading functions highlights the importance of technology in options trading. Automation enhances efficiency and reduces the likelihood of errors.
c. Commodities Business Management:
- Managing a commodities business requires expertise in commodities markets, international negotiation, and effective communication skills.
d. Derivative Arbitrage Opportunities:
- Identifying and executing derivative arbitrage opportunities demonstrates a nuanced understanding of derivatives and the ability to capitalize on market inefficiencies.
e. Market Research and Forecasting:
- Researching major indices like SPX, DOW, and NASDAQ underscores the importance of market analysis in options trading. Forecasting is crucial for making informed decisions.
f. Software Collaboration for Order Execution:
- Collaborating with technology teams to improve order execution software reflects the intersection of finance and technology in options trading.
g. Risk Management Strategies:
- Implementing risk management strategies is fundamental to options trading. It involves minimizing portfolio risk and ensuring sustainable trading volumes.
2. Options Trader Skills and Traits:
a. Analytical Skills:
- Analytical skills are paramount for evaluating potential deals and judging the profitability of options trading strategies.
b. Customer-Service Skills:
- Persuasive communication and making clients comfortable with recommendations highlight the customer-service aspect, crucial for client satisfaction.
c. Detail Orientation:
- Options trading involves meticulous attention to detail, especially in analyzing market indicators, historical data, and technical numbers.
d. Initiative:
- Taking initiative is essential for building a client base and seizing arbitrage opportunities. Cold sales calls and compliance review cleanup initiatives showcase proactive involvement.
e. Math Skills:
- Strong mathematical skills are a foundation for options traders. This is evident in developing quantitative strategies and understanding investment formulas.
3. Options Trader Skills Breakdown:
a. Common Skills:
- FX, Stock Options, and Equities are common skills, with 32% of options traders being proficient in these areas.
b. Specific Skills Percentage Breakdown:
- FX (32%), Stock Options (17%), Equities (11%), Stock Market (5%), Risk Management Strategies (3%), Equity Options (3%).
4. Options Trader vs. Other Roles:
a. Options Trader vs. Commodity Broker:
- While both roles involve equities and derivatives, options traders focus more on "fx," "training programs," and "stock options," while commodity brokers emphasize "commodities," "market analysis," and "risk management."
b. Options Trader vs. Foreign Exchange Trader:
- Despite sharing skills like "equities" and "derivative," options traders prioritize "fx," "training programs," and "stock options," while foreign exchange traders concentrate on "manage risk," "foreign exchange products," and "swaps."
c. Options Trader vs. Energy Derivatives Trader:
- Energy derivatives traders earn higher salaries and emphasize skills like "futures contracts," "interest rates," and "fixed income," while options traders focus on "fx," "training programs," and "stock options."
d. Options Trader vs. Hedge Fund Trader:
- Hedge fund traders earn higher pay, requiring skills in "macro," "fixed income," and "asset management," while options traders excel in "fx," "training programs," and "stock options."
5. Types of Traders:
- Options Trader, Equity Trader, Commodity Trader, Energy Derivatives Trader, Hedge Fund Trader, Forex Trader.
6. Average Salaries and Education:
- Options traders earn an average salary of $90,179, with variations based on the type of trader. Education requirements typically include a Bachelor's Degree.
7. Related Job Descriptions:
- The article provides insights into related job descriptions such as Bond Trader, Commodity Broker, Day Trader, Senior Energy Trader, among others.
In conclusion, the field of options trading is multifaceted, requiring a diverse skill set ranging from technical expertise in financial instruments to soft skills like customer service. Options traders navigate complex financial landscapes, employing analytical prowess, attention to detail, and proactive initiatives to optimize profits and manage risks effectively.
