Group One Trading, LP is a designated primary market making firm on the Chicago Board Options Exchange (CBOE). The designation of primary market maker gives Group One an advantage when it comes to participation in order flows, but it comes with the responsibility of providing up-to-date quotes on 99% of the issues, 90% of the trading day. This is known as sell-side trading. While they are centrally located on the CBOE, they also have offices in New York, Philadelphia, and San Francisco, to take advantage of floor presence and order flow on the respective options exchanges. Group One is a proprietary trading firm with 100 employees, 27 of which are traders.
The summer position at Group One gives prospective traders a front row seat to the environment and culture of an options trader. On my first day, I worked in the trading pit alongside the trading staff, serving as their lifeline to the support team. Any and all trader requests, such as retrieving market data, troubleshooting trading software and analyzing “bad trades,” were handled first by us. At first, this responsibility was overwhelming. My first few weeks at the firm, nearly all requests I was given were immediately escalated to more senior staff members. Once they were escalated, I would work with the senior team, trying to remember as much as I could about the problem and its resolution. Eventually, I found myself handling more and more requests on my own.
While a lot of the training came from immersing myself into situations and absorbing as much information as I could, we also were formally trained. Throughout the day, senior members of the team would lecture on their area of expertise, whether it be navigating the internal databases, connectivity with the exchanges, or the trading software logic. As a support staff member, one of my main roles was to assist traders and troubleshoot the software and logic when things went wrong. The culture inside the firm was very comfortable and so, while operations went according to plan, the work environment was relaxed. It was much different when systems broke down or lagged and we were expected to quickly resolve the issues. In an industry where performance is measured in milliseconds, there isn’t much room for hesitation or inaccuracy.
To be clear, this was a trading internship despite not being directly trained in the art of trading. By starting prospective traders on the Trade Support team, interns and new hires gain a unique perspective of the business. We fielded a variety of problems from traders and began to understand a lot about everything traders do except trade. I began to understand not only how the trading software and firm databases work but also, how they don’t and how to work around these gaps.
Not only were we given exposure to a highly secretive trading industry, we were also given introductory options theory classes led by the Director of Education. These classes not only gave the interns color on the role of a market making firm, but it also focused on theoretical aspects of pricing options, managing different types of risk, and handling order flow.
Perhaps the most important takeaway from the internship was the experience of managing tasks and responsibilities in a high-pressured environment. For 10 weeks, I watched trader’s manage their positions and react to changing market conditions. While I did not have the training to understand exactly what they were doing, the fast-pace, competitive environment kept me attentive. There are many perks to working for Group One, but what probably sets it apart is its culture. Nowadays, trading can be done, literally, from any corner of the world with an internet connection. But, working with a group of fun, driven and competitive individuals who all want to make a lot of money sounds like a pretty good gig.
Photo Credit: Alexandra Studios