It’s what I mentioned in the fifth post of this thread back on page one. At this point save yourself the embarrassment.
Please help me, option market making risk return, thanks
- Thread starter 76132
- Start date
It’s what I mentioned in the fifth post of this thread back on page one. At this point save yourself the embarrassment.
Hmm...given how hard it is to get a straight answer, maybe they won't even ask the question. I guess I imagined that trading, like any other business, has investors and requires a risk/return profile that makes sense. Because of that, I would guess the firm would like to know how much capital I'd need and how much return I could give them. Although this doesn't factor in any diversification across desks.
I mean most trading desks do operate independently, a lot of complaints at firms is that desks are pretty silo-ed off from each other. So yes, I would come in and start a desk and it might be pretty independent of other desks - unless some other desk is already trading the same product.
Assume that you know someone in the firm and they throw you a bone... "they" would offer you some single name book and limit you to say 20-lot markets. You have this idealized view that is side-effect of drinking B-school Koolaid. What idiot told you that this is how the sell-side operates?
Bro, it's automated.
This is not the buy-side. You are not given a desk and $10MM to play with. You code. You don't code? Well then your services aren't needed.
I worked on a DM/exotics desk in the early 90s (eight whole months) when they gave first and second year people some discretion. I quit and took the FSOT (Foreign Service).
You're 20 years too late.
And nobody uses VaR in OMM.
I have been on the buy-side since 1999, so I am sure things have changed. Perhaps my boy @sle will chime in as he was in SS/structured products for many years before going to the buy-side.
The quickest method of exiting an interview is to ask what you position limits are, or what you'll be allocated. If they don't laugh they are Saints.
The quickest method of exiting an interview is to ask what you position limits are, or what you'll be allocated. If they don't laugh they are Saints.
I never said I'd ask what position limits are. On a per strike basis, generally won't exceed 2000 lots but even then, what does that matter. It's the Greeks, which I can give a range that I will operate in.
Then you dad had better own the firm.
Position limits re: greeks.
I worked as a PM for a mid-market HF in 2005. They did a background check and I talked to the Principal for five minutes. He handed the call off to a guy named Yuri who had left Quantum. He asked me my limit on gamma on index vol. I told him "10,000" and he hesitated for a moment and replied, "fine."
At that point I knew that I could do anything I want. It was a great deal until we stopped getting our bonus.
Good to know. I've never seen a VaR number so that makes sense. Only G/L on different vol curve scenarios and underlying moves.
If your undergraduate degree is in a hard science and you can program then your best strategy would be to interview for an analyst position and work your way up from there.
Business School gets you nowhere in trading. If you went to a top five school and IF you knew somebody very well placed within Investment Banking M&A - then that might be a possibility.