Start trading career as an equity option trader?

Discussion in 'Professional Trading' started by mizhael, Dec 20, 2008.

  1. Hi all,

    What are the skillsets that will be developed from starting my career as a trader on the equity option trading floor in a bank?

    And what are the exit opportunities in the future for further career developments?

    I aspire to be a successful hedgefund manager/owner in the future.

    Are there any star hedgefund managers that are from equity option/derivative background?

    I have heard that star hedgefund managers/owners come from the following backgrounds:
    (1) Stock picking & timing;
    (2) Commodities;
    (3) Fixed income markets;
    (4) Quant & high frequency algorithm programing trading;
    (5) M&A, corporate finance and distressed.

    I cannot seem to find star hedgefund managers/owners who started from equity (index) option traders...

    I am wondering if those skills such as greeks, straddles, etc. are useful for building my own fund successfully.

    I am weighing between the career as being a sell-side equity option trader vs. a (high frequency) quant trading strategy analyst in a top 10-20 quant hedgefund (I enjoy equally both C++/Java programming, as well as econ/finance and math/stochastics).

    Any thoughts? Thanks!
  2. reactor


    I'd work on the sell side until you are confident that you can make money from being on the buy side.
  3. Could you please elaborate?

    Is it a waste of time on the sell side?
  4. =======================
    Well I am thinking of Bill Lipshultz[buy side ,started in options believe it or not] his trading would be larger/longer & more profitable than ,most. And another hedgie manager whose name is im my library,forgot name ,but started in buying gold stock options.

    You dont see many option funds also
    or many people start /stay with options for the same reason ;
    few teens or any age start a property & casuality insure co!!!!!
  5. What is this, another stupid thread about a guy choosing between making 200,000 a year or 250,000 a year? Pick what you like most.
  6. come on, the goal is not 200K vs 250K.

    The goal should be 20B vs. 100B in the future and then look backwards, which direction and skill-set now should lead the maximal investment gain and fun in the future...
  7. dr_sean


    Steven Cohen started out in options trading at Grundel (now defunct). So there is your answer really. Don't forget the guys who made it huge in options e.g. Blair Hull, the Ritchie Brothers, Jeff Yas (SIG).

    Options is my bag so take my opinion for what it's worth and no more, but I'd say, when comparing w/ a quant position, the latter tends to be more affiliated w/ back/middle office of course there are some good people who come out of the quant side but unless it is a trading oriented position, take the option position simply on the basis that it is for producers.

    Just curious about the position? You know if it's sales-trading vs. market making? Or any directional trading?

    Good luck.
  8. cvds16


    makes a really huge difference to judge this offer !
  9. Very informative. Thanks a lot for your valuable inputs!

    Quants can go to stat-arb, or high frequency shops. The stat-arb guys research on finance literature and design trading strategies, which can be fun too. The high frequency guys are essentially market-making, using speed as an advantage. And they can make consistent and stable return even in bad days, due to their short term nature of risk taking. It can be fun too.

    It's great to know that Steven Cohen starts in option trading. He's one of my models. :=)

    I will have to find out more about the position. What's the difference between sales-trading vs. market making vs. directional trading?

    The ultimate question is: given the same guy, and the same amount of intelligence and devotion, which direction and skill-set should we start with and build upon, in order to lead to the maximum future investment gain and fun?

    After a certain threshold, personal money is not something we are concerned much any more. It's the joy of beating the market and taming a wild beast that matters. That's why I ask these questions. If you are a shark, you like deep water, right?
  10. cvds16


    maybe it would be a good idea to take the 'big talk' a real big notch down if you don't know the difference between them.
    As an aside something to think about: most big traders I know are quite humble.
    #10     Dec 22, 2008