option pricing

A

actuary83

Hello guys. I am currently pursuing a career as an actuary not sure if you know what that is but anyway I have been studying for my 3rd exam (MFE). The entire exam is pretty much options pricing (binomial trees, black-scholes,brownian motion etc) also bond options, bond pricing and interest rate models. Wow this stuff is interesting! So I have a few questions for you guys.

1.) Assuming I continue the actuary path and master statistical modeling and credibilty theory, and on the side I continue to expand my knowledge in theoretical option pricing. How useful are these skills for a trader? Or in otherwords can I use these skills and learned knowledge to be successful at trading?

2.) Say I add a C.F.A credential in there would this greatly enhance my probabilty of being a succesful investor?

3.) what types of jobs are there (that pay well) that would allow me to expand my investment knowledge and would make use of the above skills.
 
Quote from actuary83:

Hello guys. I am currently pursuing a career as an actuary not sure if you know what that is but anyway I have been studying for my 3rd exam (MFE). The entire exam is pretty much options pricing (binomial trees, black-scholes,brownian motion etc) also bond options, bond pricing and interest rate models. Wow this stuff is interesting! So I have a few questions for you guys.

1.) Assuming I continue the actuary path and master statistical modeling and credibilty theory, and on the side I continue to expand my knowledge in theoretical option pricing. How useful are these skills for a trader? Or in otherwords can I use these skills and learned knowledge to be successful at trading?

2.) Say I add a C.F.A credential in there would this greatly enhance my probabilty of being a succesful investor?

3.) what types of jobs are there (that pay well) that would allow me to expand my investment knowledge and would make use of the above skills.
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Knowing probability theory and financial modeling certainly doesn't hurt. But in the overall scheme of things it's a small factor in whether or not you become a successful trader.

Remember that Myron Scholes of Black/Scholes fame - and a Nobel prize winner - almost brought down the financial system ten years ago when his fund Long Term Capital Management went belly up. So with all of his credentials he was a moron of a trader.

I know a CFA certification is difficult to get and I certainly wouldn't discourage you from pursuing it - sounds right up your alley as an actuary - but no, I don't see that it would help you become a successful trader. It might help you get a job.
 
Quote from actuary83:

Hello guys. I am currently pursuing a career as an actuary not sure if you know what that is but anyway I have been studying for my 3rd exam (MFE). The entire exam is pretty much options pricing (binomial trees, black-scholes,brownian motion etc) also bond options, bond pricing and interest rate models. Wow this stuff is interesting! So I have a few questions for you guys.

1.) Assuming I continue the actuary path and master statistical modeling and credibilty theory, and on the side I continue to expand my knowledge in theoretical option pricing. How useful are these skills for a trader? Or in otherwords can I use these skills and learned knowledge to be successful at trading?

2.) Say I add a C.F.A credential in there would this greatly enhance my probabilty of being a succesful investor?

3.) what types of jobs are there (that pay well) that would allow me to expand my investment knowledge and would make use of the above skills.
More...

It depends upon what it is you want to do. If you want to be an analyst, you are heading down the right path with the formal education. If you want to actually be a trader, at some point you are going to have to stop with the theory and learn how the markets really work.

Good luck.
 
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