Any option traders working at hedge funds or prop shops??

Option Traders.

Can you please share your experience as an options trader?

1. Are you trading based on your decision or you need approval for each trade?
2. Do you trade earnings?
3. How much capital are you allowed to trade?
4. How does the compensation work?
5. Does the computer or you decide what to trade?

And if you guys can share anything from your job would be a great help. Thanks in advance.

Vig

Comments (6)

Feb 1, 2014

I can take a stab on the prop side of things.
1. Your decision, although you may have some baseline restriction; getting approval would waste too much time.
2. Most prop shops are market makers and avoid overly directional bets.
3. Depends on your experience and the shop.
4. PnL based, depending on the shop may be based on group PnL and even company PnL as well.
5. You usually have a model from which you can see if the market is currently misvaluing an option.

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Feb 1, 2014

In the case of option traders at investment banks, do they have a better prospect on exit opps? By exit opps I mean either moving to a propshop or moving to a hedge fund.

Feb 1, 2014

Sorry, I'm pretty new, but isn't your goal to move out of the prop shop?

Feb 1, 2014

Ugh. "Exit ops" are a concept only found in investment banking or consulting. If you want to do trading then you probably don't want to move out. Consequently, good traders don't have "exit ops" in the traditional sense, because why the fuck would you want to leave if you're profitable and like the job? Your goal is only to make more money.

    • 1
Feb 1, 2014

Totally agree with @"euroazn" exit ops don't really apply to trading, some exceptions would include institutional traders who receive better benefits at a different shop etc. Someone getting so successful they leave their shop and start their own fund etc. But you rarely see a trader using "exit ops" like a banker would.

    • 1
Feb 1, 2014

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