Derivatives Careers

Updated on April 24, 2024
Article byWallstreetmojo Team
Edited byAshish Kumar Srivastav
Reviewed byDheeraj Vaidya, CFA, FRM

List of Top 3 Careers in Derivatives

Below are some of the Derivatives careers/job roles that a person can opt for.

Derivatives Careers

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Overview of Derivatives Careers

Derivatives are highly complex financial instruments that derive their value from the underlying asset. They are traded in every financial market across the world and boast of some ultra high-value transactions. A career in this industry by nature of it is very demanding and, at the same time, very rewarding. It can take an individual to the greatest depths of financial transactions exposing them to the matrix of a highly intertwined network of global markets.

Derivatives are a massive industry that is regulated by governing bodies in every country. Lastly, it is a great generator of wealth and employment and has been the flag bearer of weakening the frictional irritation in the banking industry, thus promoting growth in the overall economic scene.

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Below are some of the most important careers that an individual can pursue in the Derivatives industry.

Career #1 – Derivative Operations Analyst Job Role

Derivatives operations are a role that is primarily concentrated towards the middle and back office of a firm. It is the most critical job in the whole business of trading.

Major Responsibilities

  • We are booking the trades executed by the front office and capturing them in the internal systems.
  • Make sure all the trade economics match with the counterparty, raise it with the trader appropriately if any discrepancy is found.
  • Validating the trade in the system and sending a confirmation email to the counterparty.
  • Compute Profit & Loss and report the trade to the regulator.
  • Make sure collateral is in place and update the margins required for both long and short.
  • Make sure trade gets settled in a smooth way, and there are no discrepancies in the settlement, if any, investigate appropriately and raise it with the concerned team.
  • Following up with the counterparty for any outstanding settlement and updating them of any interest claims for late settle.
  • Reconciling all the trades in the internal systems for own records and accounting purposes.

Qualification and Skills Set Required

  • The incumbent should possess at least a bachelor’s degree with a focus on economics, business finance. A Master’s degree is highly desirable.
  • Should possess analytical skills and be comfortable with large data and high-volume transactions.
  • Quick learner and a team player with a solid understanding of the trade flow process.
  • Advanced certifications like CFA and FRM would be an added advantage.

Top Companies that Hire (Applies to all the below professions)


  • The median salary offered to an operations analyst in the United States is around $56,000.

Job Statistics and Growth Prospects

  • As per the Labor statistics official figures in the United States, operations analysts are poised to grow at 27.4% between 2016 and 2026, an estimated 31,300 jobs are expected to open up in this period.
  • Since it constitutes about 70-80 % of all the work in the capital market division of a bank, the profession will never go out of the call, because for every trade executed by a trader, there is a whole lot of procedure involved which needs to be taken care of by the operations department.


  • A highly sophisticated profession which gives you exposure to some high-value transactions and an opportunity to learn how the products work. Propels you closer to the action as the trades are highly critical and have a huge bearing on the firm’s reputation and the profit motive. Gets exposed to a variety of complex products, their intricacies, and working mechanisms, which might help in propelling the career into trading and developing expert-level financial acumen.
  • Lastly, it is a very lucrative profession with hard work and determination; an individual can become very successful both money and status wise.


  • As stated earlier, it’s a very demanding industry as justified by the nature of criticality. It may not be best for people who can’t sit long hours with the ability to deliver consistently. Also, it can become monotonous for some, unless they make an effort to try their hands at new things and expose themselves to new problems.


  • As the economy in emerging markets picks up, there will be greater investment activity as a result of increased savings and better access to education. As such, companies will have more money and added complexities to deal with, which will lead to additional employment opportunities.

Career #2 – Derivatives Trader Job Role

The job role of a derivative trader is a professional who decides and conducts business for his company. They create a market by supplying bid and offer quotes for all the financial products. Needless to say, they are highly instrumental in profit-making for the firm.

Major Responsibilities

  • Determine and evaluate movements using modeling skills to create markets and execute cost-effective trades.
  • Gathering detailed information to project market trends and make buy/sell decisions accordingly, at the same time keeping informed all the stakeholders of the trade agreement.
  • I am getting in touch with the sales department and clients to discuss market volatility and trends and unanimously reach a trading decision.
  • Carry out valuations and forecasting to publish relevant reports and identify issues impacting client needs through the analysis.
  • Building good business relations with the client and securing high profitable trades for them. At the same time, accommodate and understand the needs as well as offer fruitful solutions to new clients.
  • Make intelligent trading decisions using analytical experiences in the face of ambiguity and precariousness. Also, act on how to shrink losses.
  • Build good rapport with brokers and dealers to promote and maintain a smooth flow of the trade and the process as a whole.
  • Assist and educate subordinate traders and help them sync their goals with the companies objectives.

Qualification and Skill Set Required for the Job

  • Impeccable academic record from a top tier institute with masters focused around mathematics, business finance, statistics.
  • CFA/FRM/CPA is highly preferred.
  • Robust numerical abilities and stamina to think under pressure with a desire to create a winning situation.
  • Should possess trading IQ and an urge to take advantage of uncertainties.
  • Foreign language skills are preferred.
  • Pass general securities representative examination.

Job Statistics

  • BLS had estimated the growth for traders to exceed 21% between 2006 and 2016. In that period, traders were effectively benefitted from movements triggered by pensions of baby boomers and their reduced dependence on social security. About 376,000 people were employed as traders, according to 2016 data.


  • Derivatives traders earn an average income of $ 93,517 p.a.


  • Traders help companies take a suitable position in the market, as per their defined policy objectives. This profession has the ability to expose you to the best of the statistical and research world making you a true expert at quantitative modeling and financial engineering. This is the most critical job in an investment bank because it has a massive impact on profits and losses; as such, the hiring and training of traders are sincerely world-class.
  • Above all, it’s a very lucrative profession; traders have a stake in the profitability of a deal. Apart from the salary, they enjoy a host of other exclusive benefits like social outings, other perks, and allowances only designed for them.


  • It is often noticed they have to work long hours without breaks. Additionally, a corporate action can severely impact a position, and a trader may not get enough time to rectify it.


  • As the economic activity picks up, companies will need more and more expert professionals to be their face, which will lead to more employment opportunities.

Career #3 – Derivatives Risk Analyst Job Role

Derivative risk analysts help firms in evaluating portfolios, including foreign investment, and assess the risk factor in trading decisions. They employ their quantitative skills to estimate possible losses and provide suggestions to control risk through various portfolio strategies, derivatives strategies, and currency trades.

Roles and Responsibilities

  • Make recommendations on covering risk and devise strategies to mitigate risk at the same time widen returns.
  • Research current and future trends to evaluate their impact on the economy and the financial sector as a whole. Accordingly, recommend to the management plans conducive to further their objectives. At the same time, analyze new industry developments.
  • Carry out research analysis to understand the gravity of the risk, thus publishing risk reports outlining the findings and suggest remedies to make the best use of the situation.
  • Evaluate the firm’s market standing and make sure they are in full compliance with the Basel norms as well as regulatory requirements.
  • Carry out modeling and statistical analysis by using various software packages to gauge the risk factors in current investment and assist management with future investment decisions.
  • Build back-up plans to deal with emergency situations.
  • Analyze the risk associated with lending.
  • Work on various risk projects. Consult other statistical experts in order to have enhanced output for the project.
  • Assist management in understanding and responding to specific risk exposure.
  • Maintain industry standards and protect companies’ public image.

Qualification and Skill Set Required

  • Masters degree from tier 1 institute, with a focus on applied statistics, mathematics, physics, economics, business analytics.
  • Excellent computer skills with a working knowledge of programming languages.
  • Appeared or willing to appear for FRM/CFA/IRM.
  • Willing to learn a foreign language is advantageous.
  • Strong quantitative aptitude with a positive attitude and problem-solving approach.
  • Solid reasoning abilities with a high level of numerical skills.
  • A keen observer with a desperate urge to read and predict trends.
  • Desire to create a winning situation and ability to maintain composure in the face of uncertainties.
  • Proficient at investigating and finding solutions collaboratively with team members.
  • Ability to develop complex data into substantial analysis.

Job Statistics and Prospects

  • Employment opportunities are estimated to grow manifold for risk analysts, as per the Bureau of Labor Statistics, the employment for this profession will grow by 11% between 2016 – 2026, much faster than the 7% growth rate of all the other professions across the United States.


  • The salary offered to risk analyst was $57,192 as of May 2019.


  • It’s a booming industry with brightening prospects. Competition is usually high, but enhanced industry standards and increasing regulations only mean more and more capital and resource allocation to this department. Given the nature and business impact of risk, companies have become more risk-conscious and don’t think twice before allocating supplementary resources to the business. As such, the requirement of risk professionals is on the rise and will always be growing.


  • Risk by nature is a very challenging industry and demands great sacrifices. It involves very sophisticated testing, analysis, and forecasting, which is a very stressful task even for experts. Therefore young aspirants must develop a knack for working under pressure situations and build a strong reasoning power in order to position themselves to have a great career at risk.


  • Companies rely heavily on risk professionals to further the growth objectives due to their forecasting skills. Their analysis helps companies to make informed decisions. For this reason, their contribution to profit-making is priceless. Risk jobs, along with other finance jobs, are on course to grow at unprecedented rates.


Derivatives job roles are a giant industry with great future potential. It has varied lines of professions. This industry is one of the major factors that thrust employment levels in an economy; as investment in the economy keeps on increasing on account of various macro factors, companies get added reasons to hire more employees.

Therefore, the careers/job roles in the derivatives industry have a supreme contribution to the financial success of the banking sector, thus largely influencing the economy as a whole.

Recommended Articles

This has been a guide to Careers in Derivatives. Here we provide the list of top 3 Derivatives job roles, descriptions & paths, including Derivatives Operation Analyst, Derivatives Traders, etc. You may also have a look at these articles below –

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