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Thanks for the link but I did mean more in general. I’ve got a textbook on mathematics for finance in the mail I’m planning on getting through this summer and w

by ceh123 5y ago

Thanks for the link but I did mean more in general. I’ve got a textbook on mathematics for finance in the mail I’m planning on getting through this summer and was wondering of other potential resources to get a good background understanding of trading over all. I guess one goal would be to be able to walk into a trading role at a hedge fund (long/short probably? Also curious about macro strategies) and be at a decent starting point to hit the ground running

qeternity 5y ago
You can study all you want, and any of the major text books on Options/BS-M will give you a primer. But, my best piece of advice: open a paper trading account and start running some options positions. Pick a few underlyings but make sure they're all different: 1x single name, 1x index, 1x commods/fx. Then using what you've learned in your textbook, just keep your book hedged, without any opinion. Watch how your greeks change, and how that corresponds with your risk and pnl. Most people only really end up learning on the job. I didn't "get" options until I started running some risk and making some money. But that only happened when I first started working.
- ceh123 5y ago
  Sweet that makes sense. Also for choosing one underlying do you mean only trade options on one single security? So not doing company by company analysis but choosing a single company and then trading options on that one to learn the types of strategies?
  - qeternity 5y ago
    In terms of learning options, fundamental analysis isn't relevant: the "why" doesn't matter. If you're wearing a bunch of 20 delta call spreads, and the underlying jumps 10% it's more important to learn what that means for your risk than it is to learn why the underlying moved. Now of course you want to do both, because ultimately you'll want to know why vols are trading where they are, which will be determined by the behavior of the underlying. But at first you just want to get a qualitative sense of how all the pieces fit together. Then once you do, you can do you fundamental analysis and incorporate that thesis, and start to develop a vol thesis.
    - ceh123 5y ago
      Okay yeah that makes a lot of sense. Thanks for the suggestions.

by ceh123 5y ago

qeternity 5y ago

You can study all you want, and any of the major text books on Options/BS-M will give you a primer. But, my best piece of advice: open a paper trading account and start running some options positions. Pick a few underlyings but make sure they're all different: 1x single name, 1x index, 1x commods/fx. Then using what you've learned in your textbook, just keep your book hedged, without any opinion. Watch how your greeks change, and how that corresponds with your risk and pnl. Most people only really end up learning on the job. I didn't "get" options until I started running some risk and making some money. But that only happened when I first started working.

ceh123 5y ago
Sweet that makes sense. Also for choosing one underlying do you mean only trade options on one single security? So not doing company by company analysis but choosing a single company and then trading options on that one to learn the types of strategies?
- qeternity 5y ago
  In terms of learning options, fundamental analysis isn't relevant: the "why" doesn't matter. If you're wearing a bunch of 20 delta call spreads, and the underlying jumps 10% it's more important to learn what that means for your risk than it is to learn why the underlying moved. Now of course you want to do both, because ultimately you'll want to know why vols are trading where they are, which will be determined by the behavior of the underlying. But at first you just want to get a qualitative sense of how all the pieces fit together. Then once you do, you can do you fundamental analysis and incorporate that thesis, and start to develop a vol thesis.
  - ceh123 5y ago
    Okay yeah that makes a lot of sense. Thanks for the suggestions.