Trading · Equity options

You trade equity options at DRW, betting on the gap between how much an index moves and how much the single stocks inside it move. The seat sits in the Equity Options team and covers American and European markets. The firm trades its own money, so there are no clients to serve. Your job is to spot prices that look out of line between index options and single stock options, put on trades that profit when they come back into line, and manage the risk while you wait.

An option is a contract giving the right to buy or sell a share at a set price by a set date. Its price depends mainly on how much the market expects the share to move, called implied volatility. A dispersion trade sells volatility on an index and buys it on the stocks inside it, or the reverse. It pays off when the stocks move more independently of each other than the index price assumed, so at heart it is a bet on correlation, the degree to which stocks move together.