Career Avenues in Derivatives
Derivatives are part of the sell-side of finance. Most careers in the sell-side of finance can be approached from one of four avenues. Finding a career in derivatives should begin with picking one of these four career avenues and drilling down from there.
Sales
When imagining a career in derivatives, a sales role is often what comes to mind for most people. Much like a sales role in any other field, the underlying goal is to bring in new clients and their assets. Though those working in sales need to know enough about derivatives to secure new clients, they do not need to have a detailed understanding of all aspects of derivatives, since they normally are not involved in the more complec areas of trading or analysis. Derivative sales roles fall under two main categories – retails and institutional. The burnout rate of retail investors is often quite high, while institutional investors tend to be long term clients.
Trading
Traders are the people carrying out the trades. These trades may be made on an exchange floor or over the counter, depending on the derivative being traded. Trading derivatives can be quite complex. Derivatives are a form of speculative trading, which can be highly volatile. They do not involve trading assets, in the typical sense. Instead, traders working with contracts that relate to an underlying asset.
Analytics
These roles are often the most technical within the field of derivatives. The roles of an analyst is to forecast future events as well as keep up with current events that may have an impact on events in the area in which the analyst focus. For example, an analyst may look at how different sectors of the market interact and the financial implications of this interaction on an underlying asset.
Back-Office Support
Many careers fall under the umbrella of back-office support, including compliance officers and accountants. Careers in this field can vary greatly in the type of education, personality, and experience that are required.
