Finding a Job Trading Options

Discussion in 'Options' started by bgilbart, Mar 27, 2006.

  1. bgilbart


    Hi All,

    I'm wondering if anyone has suggestions on the best resources for finding employment in the options trading industry. Specifically, I'm interested in finding employment with a company that trades options to grow capital. I'm currently employed as an engineer in San Francisco, but have been trading options in my personal accounts for 3+ years and have decided that options trading is where my passion is and I'd like to make it a profession.

    A few related questions:

    1. Are proprietary options trading firms similar to equities prop(chop) firms that require high volume trading and your own capital up front?
    2. Would seeking employment with an options-focused hedge be better than with a propriety options trading firm? What defines one from the other?
    3. Is it possible to find salaried positions trading options, where there's at least some minimum salary and then performance-based after that?
    4. Would it be possible/advisable to apprentice or otherwise work for a single or a few traders to learn the ropes, how they/the firm trades? What would be the typical title of such a position?
    5. I have an MS in Engineering from Stanford, so my actual degree is not finace related. Will that be a problem? I have a great understanding of option pricing and feel like the analytical skills required are similar.
    6. What is the best website providing a listing of employment opportunities for options trading?

    Hope this is enough beta to get the thread started.
    Thank you for your insights. -Brian
  2. shelly



    I’m not sure what you mean by “grow capital”. Doesn’t every firm want to increase its capital?

    Most proprietary trading firms are interested in numerical skills rather than a finance background, so your engineering background is a definite plus. Your understanding of option pricing should also help. However, the fact that you have actually traded options before may in some cases hurt you since many firms prefer traders with no trading experience. When a new trader has preconceived ideas of how to trade it may be difficult for the firm to train the trader to follow the firm’s trading philosophy.

    There is no uniform pay arrangement. Some firms hire traders on a fixed salary with a bonus at the end of the year. Other firms split the profits (after expenses, which can be considerable) with the trader. The split might range from 30-70 (30% to the trader, 70% to the firm) to 70-30, depending on how good the trader is. In most cases a new trader does not need to put up any trading capital – the capital will be put up by the trading firm.

    At some firms traders work individually, making all their own decisions about the best way to trade. At other firms traders work in teams, making decisions with the team’s best interests in mind. In the latter case a firm might have an index option team, or a treasury options team, or a foreign currency team. Each team member is constantly communicating with other team members to maximize the team’s profitability.

    The entry-level position at most proprietary trading firms is usually as a trading assistant. Depending on the firm’s training program a trading assistant may have to wait anywhere from 6 to 18 months before he is allowed to trade. This may seem like a long training period but it is usually time well spent – there is a great deal to learn, and no firm wants to send someone out to trade who doesn’t have a full understanding of the principles of option trading.

    I cannot say that I am familiar with all the proprietary trading firms which you might want to look into. However, the following firms are reputable and are constantly looking for potential traders. Perhaps other forum members can suggest additional firms:

    Chicago Trading Co.
    DRW Trading Group
    Group One Trading
    Knight Trading Group
    Mako Group
    Peak6 Investments
    Susquehanna International Group
    Wolverine Trading

    As to employment websites, you might try the following:

    Wilmott and dice tend focus on the financial engineering and software side of the business.

    I hope this helps.
  3. segv


    Shelly? As in Shelly Natenberg? Brian, you are getting some very sound advice indeed.

    I also live in San Francisco, have an engineering background (software), and trade for my own account. I have found my engineering and quantitative background to be directly applicable to trading in the electronic markets, having written my own software platform for automatic quoting and hedging in various futures options markets. However, my experience has not been helpful in gaining the interest of proprietary options firms here. Perhaps that is a reflection of the climate here in San Francisco, following the acquisition of the Pacific Exchange by NYSE Arca. Or perhaps these firms are simply looking for younger, less experienced candidates that they can train from the ground up. (Although, at 27 I am hardly over the hill.)

    Good luck with your hunt, Brian. I would be interested to know your results. Shelly's list of firms was very comprehensive.

  4. bgilbart


    Hi Segv,

    Yes, I already thanked Shelly as I've done some research of my own and she named all the firms that have been recommended to me and then some. Her response was quite comprehensive and thoughtful.

    As for me, I'm also 27 and live in SF. I've even decied that I'm willing to move for a job if it's the right fit and it means getting in with one of these firms.

    I'm currently in the process of sending my resume out to these companies and to friends and other contacts in the industry. I'm also working with a headhunter of sorts who's well connected in the industry.

    With your background, it's surprising you've had a hard time getting firms to be interested. I'll keep you and the rest of the board posted on my search.

    PM me if you want to link up for a beer and talk sometime.
    And thanks again Shelly!
    Cheers, Brian
  5. bgilbart


    My apologies, I was informed that Shelly is short for Sheldon, so it would be: "he."
  6. Shelly,

    Which prop firm are you associated with? If you don't mind me asking.

  7. segv


  8. I seriously doubt it is THE Sheldon Natenberg....IF it is then WHY the Hell haven't you updated your book!!!!!!