OMM/QT pre-internship reading recommendations?

Joining a OMM internship, and I'd like to prep as much as possible on equity vol & Equity Index/ETF theory.

I found the Forex book by Jewitt really good, but what would be the best corresponding literature for equities? So far I've come across Sinclair, Natenberg, and Bennett. Are these the best to stick to or do you have any other recs for vol?

For Index/ETF, what are the best references and topics to know, other than basic creation/redemption?

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WSO Monkey Bot

O

9mo

For prepping for an OMM (Options Market Making) internship with a focus on equity volatility and Equity Index/ETF theory, here’s a curated list of recommendations based on the most helpful WSO content and industry insights:

Equity Volatility (Vol) Reading Recommendations:

"Options as a Strategic Investment" by Lawrence G. McMillan
- A classic for understanding options strategies and their applications. Great for foundational knowledge.
"Volatility Trading" by Euan Sinclair
- Highly recommended for its practical insights into trading volatility. It’s a must-read for anyone diving into equity vol.
"Option Volatility and Pricing" by Sheldon Natenberg
- A staple for understanding the mechanics of options pricing and volatility. It’s detailed and widely regarded as a go-to resource.
"The Volatility Smile" by Emanuel Derman
- Focuses on equity derivatives models and the nuances of implied volatility. It’s an enjoyable read that bridges theory and practice.
"Dynamic Hedging" by Nassim Nicholas Taleb
- Advanced but excellent for understanding derivatives and risk management in volatile markets.
"Derivatives Markets" by Robert L. McDonald
- A beginner-friendly yet comprehensive guide to derivatives, including options and volatility.

Equity Index/ETF Theory Reading Recommendations:

"Exchange-Traded Funds and the New Dynamics of Investing" by Ananth Madhavan
- A deep dive into the mechanics, creation/redemption process, and market impact of ETFs.
"The ETF Book: All You Need to Know About Exchange-Traded Funds" by Richard A. Ferri
- Covers the basics and advanced topics of ETFs, including their role in portfolio management.
"A Pragmatist's Guide to Leveraged Finance" by Robert S. Kricheff
- While not ETF-specific, it provides a solid understanding of credit markets, which can be useful for understanding leveraged ETFs.
"The Art of Indexing" by David F. Swensen
- Focuses on the philosophy and strategy behind index investing.
"The Trader's Guide to Key Economic Indicators" by Richard Yamarone
- While not ETF-specific, it’s great for understanding macroeconomic indicators that influence index and ETF performance.

Key Topics to Focus On:

Equity Volatility:
- Implied vs. realized volatility.
- Volatility surfaces and smiles.
- Greeks and their role in options trading.
- Hedging strategies and risk management.
Index/ETF:
- Creation/redemption mechanisms.
- Tracking error and liquidity.
- Arbitrage opportunities in ETFs.
- Sector and thematic ETFs.
- Impact of macroeconomic events on index performance.

Additional Resources:

WSO Forums: Check out threads on ETF and Index Investing or S&T Literature for Interns for more insights.
Academic Articles: Look for papers on volatility modeling and ETF arbitrage strategies.
Investment Bank Primers: If you have access, primers on ETFs and derivatives from top banks can be invaluable.

These resources should give you a strong foundation for your internship. Dive in, and you’ll be ready to impress!

Sources: S&T Literature/Books for Interns?, S&T Literature/Books for Interns?, Q&A: 3rd year ER analyst

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usernameladiesman217

HF

9mo

Most Helpful

Congrats on that, OMMs are hard to break into. I'll give some perspective, although I wasn't in OMM I was in a big prop/quant shop that did some OMM work.

Every shop has their own trading and learning style. I would make sure you understand that a lot of firms will really hate you learning a lot of theory early because they want to mold you to their culture and style. The big ones here would be SIG, Optiver, maybe CTC. They want to make you into their style. So learn the math, the coding, etc. but don't worry as much about the exact details
Get good at some games like poker and backgammon. IME, the options traders always played games that were about "decision making under uncertain conditions" which these games excell at(vs something like chess which would be more about fast decision making, more like systematic equities or HFT).
Start looking at the stuff for licenses. It shouldn't be too big a deal, but some firms expect you to get a s57 pretty fast, so it could alleviate some stress just looking over the material early.

Other than those, pick up something new. If your background is CS, check out some statistics or math, and if you're in math learn some ML. Being well rounded going in gives you the ability to pick things up fast. Read some stuff. Not just the options theory and crap, but some real books. Gives you stuff to talk about with people on the desk, and ultimately your ability to get a return offer is just your ability to do the job and your ability to get people to like you. If you make money, that won't matter if people hate working with you. GL, feel free to ask followups

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asdkal

PT

9mo

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OMM/QT pre-internship reading recommendations?

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Equity Volatility (Vol) Reading Recommendations:

Equity Index/ETF Theory Reading Recommendations:

Key Topics to Focus On:

Additional Resources:

Elite Career Bootcamp. Top Job Offer Guaranteed.

Elite Career Bootcamp. Top Job Offer Guaranteed.

OMM/QT pre-internship reading recommendations?

Equity Volatility (Vol) Reading Recommendations:

Equity Index/ETF Theory Reading Recommendations:

Key Topics to Focus On:

Additional Resources:

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