Equity Derivs Trading

Hi, I'm new to equity Derivs and wondering what resources could be the best to understand it over the weekend. Currently started at a desk doing it and while nothings required right now. Could really use some help on getting across that curve! Thanks.

Comments (5)

Jun 10, 2022 - 5:10am
WSO Monkey Bot, what's your opinion? Comment below:
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Jun 14, 2022 - 8:22pm
probably_screwed, what's your opinion? Comment below:

Read Hull's book, "Options, Futures, and Other Derivatives." 

An eq derivs trader makes their money mainly off of flow trades. Commissions are getting compressed, so PnLs are increasingly composed of how they build their book. They will position their books by hedging out the specific risk of the product they trade. For options, it would be a combination of greeks (mainly delta). For delta one (futures/forwards), it would be buying / selling the basket of stocks that composes the underlying. Convertible debt combines a bit of delta hedging with corporate credit hedging (going long/short UST).

Positions may also be made in anticipation of order flow - be sure to look into structures of options and what its goal are (ex. calendar spreads hedge out theta risk).

  • Quant in HF - Other
Jun 17, 2022 - 1:04pm

Put these into your podcast: Flirting with models & The unplugged traders (their Volatility series). 

Read the Natenberg book above, after you done that, check out Dynamic Hedging by Taleb.

Jun 17, 2022 - 5:07pm
AKvB, what's your opinion? Comment below:

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