What first attracted you to Optiver?
I studied Finance at Uni because I was always interested in the industry. I also enjoy a combination of analytical and logical problem-solving, especially when that can be implemented practically, so I did an engineering degree as well. Working at Optiver was the perfect combination of these passions, a very data-driven job in Finance where I am constantly learning and constantly challenged to find new ways to optimise and solve the trading problem.
What does your role entail?
As an institutional trader and market maker, I spend a lot of my day working with external counterparties to provide prices, and liquidity and negotiate large trades. These counterparties include brokers who work on behalf of market participants wanting to put a particular trade on. We dynamically incorporate these off-screen institutional trades with our broader auto-trading stack to optimise the execution and manage the major risks involved in the trade and wider portfolio. This process involves a lot of relationship-building, on-the-fly analysis and quick decision-making.
In terms of risk management, we are constantly looking at the different risks we get from options – this includes both historical levels and forward-looking predictions to decide whether a risk is “cheap” or “expensive”. We’ll then buy any cheap risks and sell any expensive risks because we see those trades having positive expected value, i.e. we expect to make money off those trades.
What key skills are required?
How were you supported to learn during your graduate program?
We kicked off the program with 12 weeks of training. This consisted of a combination of options theory, coding, and systems knowledge for the first two weeks, with all grads (trading/risk/research/dev). The trading team then split out and did a deeper dive into options and trading theory, before trading in a simulation environment for the last five to six weeks. The simulation environment is based on real-time data from one of the Hong Kong indices and allows the grads to get a good feel for trading in a live market. It gets you very familiar with trading and the Optiver systems.
We were also assigned an Opticon (buddy) at the start of the graduate program, who would have regular catchups with us to discuss any general questions such as the grad program, the work here, or the trading theory. We would also “shadow” our buddies (i.e., sit down and watch them trade, to get an idea of what the day-to-day job was like) and see how an experienced trader thinks about trading.
After the 12-week training program, you move into a graduate role in one of the trading teams. We then commence another three months of “dual trading”, where we trade in the live market on our own, with small risk limits. The simulation trading prepared us very well for this, as it was a very easy transition from practice trading to trading with real money.
We each sat within a trading team, who helped guide us through the next three months, and had weekly catchups with a senior member of the team to discuss our trading each week as we progressed and got bigger risk limits. At the end of this period, we then moved into that trading team as an integral members and started trading for the “main book” with that team.
How do you start your day at Optiver?
I come in approx. 1.5 hours before the Japan market opens, to read up on overnight news and have a look at what are the major themes/moves overnight. We then individually come up with what trades we would like to do to start that day, and have a team meeting ~45 minutes before Japan options open for trading. In our team meeting, we’d come to a team consensus on what we wanted to trade for the day.
After this, we have a meeting with each team in Index Options, where we discuss what we want to do on each product. This helps us allocate risk better and perform better as a broader team.
What do you love about your work?
I like the people who I’m surrounded with – both the culture and the excellence. Being surrounded by like-minded people who are all very analytically talented, makes for a lot of interesting discussions during the day.
Whilst the majority of traders come from STEM backgrounds, the different degrees people did shine through in the way they approach data analysis problems to determine the best trades for us to do. This leads to a lot of productive discussions on a day-to-day basis, all of which are very mentally stimulating.
The flat structure of Optiver also means that no matter how junior you are, you have a meaningful contribution to these discussions. As we are working together as a team, we all want to make the best decisions we can, so if anyone comes up with a reason why we should/shouldn’t be doing a particular trade, they will be heard out.
The workdays are also quite structured compared to other jobs in the industry because there are clear market open and close times. Whilst after closing I will do some project work, there are no nights that I’m here into the late hours of the evening, and we don’t work weekends because the markets aren’t open.
What keeps you motivated?
The mentally stimulating discussions I mentioned above and the variations we can get in day-to-day trading. Whilst my day is quite straightforward, each day of trading presents a different set of problems that have to be solved.
What’s your advice to potential applicants?
Don’t dismiss any good ideas you have just because you are young and junior. If you think you have found a new solution to a problem that no one has thought of before, then it is worth further investigation. Either you’ll find someone who has looked at it before and you’ll learn why it didn’t work, or you’ll have a good new solution to share.