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Day One As A Junior Options Trader

Day One As a Junior Options Trader

December 13, 2016

Chapter 40 in the exclusive series for Dynamic Commodities- becoming a commodities trader

I arrived at the office at 6:45 AM on my first day as a junior options trader working for Sid Gold. Sid traded equity options for Salomon Brothers before coming to the commodities unit. Sid had a way of looking at someone, he would tilt his head down and his eyes brows would rise over the top of his glasses and focus on the person he was addressing. He looked sternly at me at the same time handing me a red book on options and option trading strategies. “Go into a quiet office, read this book and then read it again. Do not come out until you understand and memorize every single word.” I did what I was told.

I sat in that office for three straight days arriving at 6:45 and leaving after 7 PM each night. It was far from easy reading. Options were tough to understand for a novice and there was little time for questions, the traders were too busy doing business.

I emerged from the office on the fourth day and with confidence told Sid I had accomplished the task. Sid paused and asked me a complicated question about hedging an option trading strategy. Naturally, I got the answer dead wrong. With a look of disappointment and annoyance on his face he dispatched me back into the office once again.

The office just off the trading floor was like a jail cell, there were no windows just a table and chair. Sid’s assistant Ralph began to come into the office to coach me. He taught me how to calculate break-even prices for option strategies and he grilled me, in a friendly and nice way, correcting my many errors. Ralph also made me laugh; he was a very funny guy who always had a joke or a comment that was original and biting.

The options business was getting busier by the day. I tried my luck with Sid once again the next week, this time my confidence was shot. The result was the same, within 2 minutes I was back in the office reading the words that I had already seen for the umpteenth time. However, Sid did not hand the book back to me, this time he threw it at me.

The third time was a charm; I was worried because I thought that three strikes might be the end for me. Sid told me my answer was acceptable, but not great. He made me sit next to him and began to teach me how to make a bid-offer spread on an option when the phone range. That day I made my very first price to a competitor and they sold a gold option to me on my bid. Sid helped me hedge the trade and in a line right out of Goodfellas he said, “You broke your cherry.”

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Post Series: Origin Of A Commodities Trader

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