Job description

Derivatives are financial securities - for example swaps, futures, options and forwards - that depend on the value of an asset, for example, shares, to determine their value.

Derivatives are commonly based upon shares, commodities, currencies and bonds. Derivatives traders enter into agreements to exchange assets or cash over a period of time, rather than trading directly in the underlying asset. Derivatives are traded by investors who wish to speculate on the movement (or otherwise) of the value of an asset. They are also commonly used to hedge (reduce the risk in) an investment: a dealer who has invested in a particular asset may use a derivative contract to take the opposite position to the one taken in the initial investment, thereby reducing the risk to the initial investment.

The daily duties of a Derivatives Trader include:

• Monitoring the movements of markets and analysing what this means for derivatives contracts.
• Recording positions and reporting on movements.
• Carrying out client instructions.
• Carrying out trades and completing all necessary resulting obligations.
• Completing all necessary documentation.

Qualifications

Derivatives traders require a very high standard of mathematical and statistical modelling and analysis skills, commercial acumen and expert understanding of complex financial products and markets.

Salary Snapshot

Recent salaries advertised on TopFinancialJobs (February 2010) include:

• £350-400 per day for a temporary Credit Derivatives Product Controller working in London.
• £30-45,000 per annum for an Equity Derivative Trade Support Analyst working for a prestigious investment bank in the City of London.
• £20-25 per hour for a Listed Derivatives middle office role based in a large European bank in the City of London.
• £30-40,000 per annum for an OTC Derivatives Trade Support Analyst working for a leading commodity house in London.

Do you work in derivatives? Would you like to contribute to our "Day in the Life of..." series? Email us at info@topfinancialjobs.co.uk for more details.