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Traders are often referred to as "market-makers." This is because a trader is willing to either buy or sell the product being traded given the appropriate price. A trader will buy a product for his/her bid price and will sell the product for his/her ask price. In this way, our presence on the floor provides liquidity. This means we enable products to trade more easily and quickly because we are willing to either buy or sell the products.
Options are often confusing to people at first. Most of us understand the idea of buying stock in a company, so we can use a stock option to try to briefly explain options. If you decide to buy stock in a company, you pay for the stock, and you own the stock. An option puts an interesting twist on this. If you think you want to buy stock in a company but are not 100% sure, you can buy a call option which gives you the right, but not the obligation, to buy stock in the company for a fixed price within a given amount of time.
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If before the option expires the stock goes up, you may choose to exercise your option and buy the stock for the previously agreed upon price, which is called the strike price. If, however, the stock price goes down, you may likely choose not to exercise your option. In this case you do not own any stock, your option has expired, and all you have lost is the price you paid for the call option in the first place. Another kind of option is a put option. A put is similar to a call, but it provides the owner with the right, but not the obligation, to sell the stock for a fixed price within a given amount of time.
Since our traders are trading for profit, they must intimately understand the risks associated with options trading. They must be able to think on their feet and strategize quickly. Trading requires general and specific market knowledge, an in-depth understanding of the risk portfolio of the firm, and the ability to make analytical judgments and decisions on a moment's notice.
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