This post provides detailed information on the options trader job description, including the key duties, tasks, and responsibilities they commonly perform.
It also highlights the major requirements you may be expected to fulfill to be hired for the options trader role.
What Does an Options Trader Do?
The options trader is responsible for clearing out and managing the option contracts. They work closely with other traders in the options department to develop strategies and lay out trade plans.
The options trader job description involves helping the executive director in dealing with customer queries regarding trading of options and other financial instruments like mutual funds and underwritings.
It also entails writing daily report relating to trading operations, analyzing various market parameters, creating reports of trading, preparing reports on performance, etc.
The options trader is also involved in managing maturity schedules for multiple clients who have outstanding obligations on options contracts or mutual funds/securities, etc.
They work closely with other departments like customer service, human resources and finance in trading of options.
The options trader work description also includes monitoring of market’s liquidity and ensuring that all outstanding obligations to the clients are settled on time.
It also entails reconciling the customer’s account and writing daily reports on the operating conditions of business units like marketing, operations, and finance.
This helps in making strategic decisions related to marketing, operations etc.
Options traders are involved in carrying out credit analysis, assessment of potential risks, and verifying reports/audits.
Reviewing trading policies including requirements related to margin calls, minimum monthly net worth requirement for trading activities is another duty of the options trader.
They also undertake the assignment related to new product launches.
It is the responsibility of the options trader to ensure that trading activities are carried out in compliance with market regulations and the internal trading policy of the brokerage firm.
Their duties also entails maintaining records related to trades, trades executed, and documents pertaining to transactions.
They maintain client records, financial statements etc., including preparing required reports and analyzing data.
This position prepares periodic report of trading activities, personally supervising the operations of designated market makers, settlement agents, clearing members and other trading entities in accordance with the guidelines issued by various regulatory authorities.
The options trader is scheduled to conduct training related to various trading products like mutual fund products and underwriting operations or else attend to training schedules related to new product launches, etc.
Options Trader Job Description Sample/Example/Template
The options trader job description involves the following duties, tasks, and responsibilities:
- Manage a portfolio of stocks and derivatives for the company
- Calculate values for options for each customer
- Analyze information to determine whether to initiate a trade or not
- Prepare reports on market performance and financial status
- Work collectively and harmoniously with team members, management, and customers
- Coordinate with other departments in order to meet the needs of customers
- Review open positions in order to select those that should be liquidated or hedged
- Monitor the activities of traders who are under their supervision
- Trade stock based upon customer requests or company policies
- Ensure that options are entered into the system optimally
- Perform timely execution of trades
- Co-ordinate exiting of positions and coordinate with other groups in order to meet the needs of customers
- Make recommendations on options trading strategy and be responsible for ensuring that the trading group complies with those suggestions
- Manage risk
- Maintain an accurate record of all trades, including open, closed, and liquidated
- Plan for trading in additional time frames or markets within company policies as necessary (hedging).
Options Trader Job Description for Resume
If you are making a new resume or CV as someone who has worked before in the role of an options trader or are presently working as one, then you can make a compelling Professional Experience section for the resume by applying the sample job description provided above.
You can express the duties and responsibilities you have performed as an options trader in your resume’s Professional Experience section by utilizing the ones in the above job description example.
This will show to the recruiter/employer that you have been successful performing the role of an options trader, which can greatly enhance your chances of being hired, especially if the new job that you are applying for requires someone with some options trading work experience.
Options Trader Job Requirements: Skills, Knowledge, and Abilities for Career Success
Here are major requirements that you might be expected to fulfill to be hired for the options trader role:
- High school diploma or equivalent
- Technical knowledge would be desirable
- Strong communication and organizational skills
- Problem-solving skills and ability to be flexible in a fast-paced environment
- Advanced knowledge of Microsoft Office applications, especially Excel, Access, and Word
- Experience with Bloomberg terminal/ Reuters or similar financial data terminals is also an advantage but not a requirement
- Proficiency in foreign exchanges (forex) trading is also an advantage but not a requirement
- Knowledge of security trading (stocks) would be an advantage but not a requirement
- Thorough understanding of options and derivatives (financial instruments) is desired but not a requirement
- Good computer skills are required to be able to download information and then analyze it
- Knowledge of commodities (commodities price quotes, market news etc.) is preferred
- Strong written and verbal communication skills are required in order to communicate with customers and other staff members
- Ability to work under pressure and have a high-energy level are needed to meet the pace of the job
- The ability to work in a team is also required
- Candidates should have an interest in technology (computer languages)
- Good time management skills would also be appreciated.
Options Trader Salary
The average salary of an options trader is $97,960 (glassdoor.com) and $110,139 (zippia.com).
According to Zippia, the best paid cities are: New York, NY, $150,962; Stamford, CT, $125,345; Greenwich, CT, $125,289; Detroit, MI, $111,949; and Houston, TX, $108,035 per year.
In the United States, there are over 1,849 options traders. Males predominate in options trading employment.
There are more male options traders in the United States, 90%, than female, 9%.
White is the most common ethnicity among option traders, accounting for 72.0% of all options traders.
In comparison, 10.5% of options traders is Asian, and 10.1% is Hispanic or Latino.
Options Trader Career Opportunities
Here are various career opportunities individuals with options trading background can access:
- Options trader
Options traders are responsible for buying and selling options contracts on various financial instruments, such as stocks, bonds, and commodities.
They may work for a financial institution or as a self-employed trader.
2. Options trading desk manager
An options trading desk manager is responsible for overseeing a team of options traders and ensuring that the team is operating efficiently and effectively.
This may include setting trading strategies, monitoring market conditions, and providing guidance and support to the team.
3. Head of options trading
The head of options trading is the top executive responsible for the overall management and direction of the options trading department within a financial institution.
They may be responsible for setting trading strategies, managing risk, and developing new products and services.
4. Chief options strategist
A chief options strategist is a senior-level options trader who is responsible for developing and implementing options trading strategies for a financial institution.
They may also be responsible for analyzing market conditions and providing insights and recommendations to traders and other stakeholders.
5. Options trading mentor
An options trading mentor is an experienced options trader who provides guidance and support to newer traders, helping them to develop the skills and knowledge they need to succeed in the field.
6. Options trading coach
An options trading coach is similar to a mentor, but may take a more hands-on approach to helping traders develop their skills.
They may work with traders on a one-on-one basis or in small groups, providing feedback and guidance as needed.
7. Options trading analyst
An options trading analyst is responsible for conducting research and analysis on options trading strategies and market conditions.
They may work for a financial institution or as a consultant, providing insights and recommendations to traders and other stakeholders.
8. Options trading consultant
An options trading consultant is an independent professional who provides advice and guidance to traders and other stakeholders on options trading strategies and market conditions.
They may work with a variety of clients, including financial institutions, hedge funds, and individual traders.
9. Options trading instructor
An options trading instructor is responsible for teaching courses or workshops on options trading to students or professionals.
They may work for a financial institution, a trading school, or as a self-employed instructor.
10. Options trading author
An options trading author is an experienced options trader who writes books or articles about options trading strategies and techniques.
They may also provide educational resources and materials for traders and other stakeholders.
Challenges faced by Options Trader on the Job
Here are major challenges that options traders face on their job:
Options traders often face significant volatility in the markets, which can make it difficult to accurately predict the movement of the underlying asset.
This can lead to unexpected losses and may require traders to constantly adjust their positions to try and mitigate risk.
2. Time decay
Options have a finite lifespan, and their value decreases over time. This is known as time decay.
Options traders must carefully consider the time remaining until expiration when making trading decisions, as this can have a significant impact on the profitability of a trade.
3. Margin requirements
Options traders may be required to maintain a certain level of margin in their account, which is essentially a deposit used to cover potential losses.
Maintaining sufficient margin can be a challenge, especially in volatile markets, as it may require traders to constantly monitor and adjust their positions to ensure they meet the necessary requirements.
How to Become an Options Trader
Here are the steps you can follow to become an options trader:
- Start by learning about options
Get familiar with what options are, which is, a type of financial derivative that gives the holder the right, but not the obligation, to buy or sell an underlying asset at a certain price (which is also called the “strike price”) on or before a certain date (also called the “expiration date”).
Options can be used for generating income, hedging, and speculation, and for other purposes.
It is important to understand how options work, the risks and rewards associated with using them, and the different strategies that can be employed.
2. Understand the risks and rewards of options trading
Options trading involves a high level of risk and can result in significant losses. It is important to understand the risks and rewards of options trading and to develop a solid risk management plan before you start trading.
3. Choose a brokerage
In order to trade options, you will need to open a brokerage account. There are many different brokerages that offer options trading, so it is important to do your research and choose a reputable and reliable brokerage that meets your needs.
4. Get approved for options trading
Most brokerages require you to be approved for options trading before you can start trading. This typically involves filling out an application and passing a quiz or test to demonstrate your understanding of options and the risks involved.
5. Fund your account
Once you have been approved for options trading, you will need to fund your account before you can start trading.
This can typically be done by transferring money from a bank account or by using a credit or debit card.
6. Choose a strategy
There are many different strategies that can be used when trading options, including buying and selling options, selling covered calls, and using spreads.
It is important to choose a strategy that balances out your investment goals and levels of risk tolerance.
7. Place your trades
Once you have chosen a strategy and are ready to start trading, you can place your trades through your brokerage’s trading platform.
It is important to carefully monitor your trades and adjust your strategy as needed in order to maximize your chances of success.
8. Continue learning
Options trading is a complex and constantly evolving field. It is important to continue learning and staying up to date on the latest developments in order to be a successful trader.
This may involve reading industry news, attending educational events or webinars, and seeking guidance from more experienced traders.
Major Benefits of Options Trader Career
Here are major benefits of the options trader career:
Options traders have the flexibility to work from virtually anywhere and choose their own schedules.
This allows them to balance their trading career with their personal and family commitments.
2. High earning potential
Options trading can be a lucrative career, with experienced traders able to earn significant income.
The potential for high earnings is particularly attractive to those who are willing to put in the time and effort to develop their skills and knowledge.
3. Control over risk
Options trading allows traders to control the level of risk they are willing to take on by adjusting the size of their positions and the types of options they trade.
This makes it a good career choice for those who want to manage their risk profile.
4. Diverse opportunities
Options traders can trade a wide range of instruments, including stocks, currencies, commodities, and indices, providing a diverse range of trading opportunities.
Options traders can use leverage to increase their buying power, allowing them to potentially generate larger profits from smaller price movements.
6. Limited liability
Options traders are only liable for the premium paid for the option, making it a relatively low-risk form of trading compared to other financial instruments.
7. Educational and professional development
Options trading requires a strong foundation in financial markets and trading concepts, which can provide a solid foundation for further professional development. Many options traders also participate in ongoing education and professional development to stay up-to-date with market trends and strategies.
This post is useful to individuals interested in the options trader career. They will be able to learn all they need to know about the duties and responsibilities of an options trader and decide if that’s the job they want to do. It is also helpful to recruiters/employers in making a detailed job description for the options trader position in their company.