blog Bonorum et Malorum

How to make a successful career in the derivatives market in 2023

Written by Fmi.Online

How to Make a Successful Career in the Derivatives Market

The derivatives market is a huge industry within the financial sector. A large portion of the workforce involved in the financial markets is directly or indirectly associated with derivatives markets.  

Derivatives refer to any financial instrument whose value is linked to an underlying asset. In simple terms, the performance of the underlying asset dictates the performance of the derivative. For example, an equity futures contract of Apple Inc. would rise in price if the market participants are optimistic about the future performance of Apple – the underlying asset. There are multiple reasons for buying a derivative rather than the asset itself, speculation being the predominant one. Today, there exist various kinds of derivative instruments such as options, futures, swaps, and forex. 

In this article, we will discuss some of the career paths in the derivatives industry, and how you can prepare for them. Before we delve into these career paths, it is important to note that working with derivatives does not eliminate the need for financial analysis as one must evaluate the underlying asset to reap benefits from derivatives.

Job Profile in Derivatives:

There are three broad job roles in the derivative markets: 

  1. Derivatives Trader
  2. Derivative Operations Analyst
  3. Derivatives Risk Analyst

Derivative Trader

A derivatives trader conducts research and creates strategies to trade derivatives across fixed income, commodities, and equities with an aim to make a profit with price fluctuations. These include financial instruments such as interest rate swaps, total return swaps, fixed income and commodity futures, equity index options, and other credit derivatives. 

Moreover, a derivative trader evaluates trading strategies, improves trading practices, conducts portfolio analysis, creates performance reports, and maintains relationships with multiple brokers. This ensures efficient and timely execution of trading positions, and trade settlements, and improves accuracy in the cash flow of trades.

Qualifications required: 

In general, the following qualifications are required to become a derivatives trader, however, it varies with different financial institutions and the nature of work. 

  1. A bachelor’s degree in finance, economics, computers or mathematics. 
  2. Sound knowledge of corporate finance, fixed income, equities, and commodities.
  3. Understanding of financial markets and their working, including technical knowledge relevant to derivative trading, such as programming in VBA, R, SQL, Bloomberg, MS Office, etc.
  4. Other certifications, which improve your credibility, including CFA, CPA, and FRM.

Derivative Operations Analyst

Derivative operations analysts collect, analyse, and help process derivative lifecycle dealings for different types of products in order to support the derivative hedging team in the front office. Other major responsibilities of a derivative operations analyst include managing collateral of over-the-counter products, monitoring movement in margins for futures, coordinating and performing reconciliation of derivatives position and preparing periodic reports. 

Qualifications required: 

A derivative operations analyst should have the following qualifications:

  • A bachelor’s degree in accounting, finance, or business administration.
  • Sound knowledge of derivative instruments along with an understanding of investments and financial markets.
  • Strong organisational skills
  • Knowledge of relevant tools such as Microsoft office, Macros, etc.

Derivatives Risk Analyst

In addition to analysing different types of fixed-income strategies and yield curve positions, derivatives risk analysts evaluate macroeconomic developments. Among their responsibilities are developing a fair understanding of trading teams’ operations and strategies, monitoring risk limit consumption with VARs, and following up on breaches with the relevant office. They also communicate with senior management on daily and monthly transactions and P&Ls. 

The qualifications required to be a derivatives risk analyst are similar to that of a derivative trader, however, require more experience and knowledge of risk management tools. It is difficult for fresh graduates to start their derivatives career as a derivative risk analyst and requires a master’s degree or certification courses in risk management.


A career in the derivatives industry requires the capability to evaluate the underlying assets. Thus, an aspiring derivatives trader must have an understanding of corporate finance, financial analysis and working of financial markets, along with introductory or intermediate knowledge of technical analysis to understand price movements. Moreover, you need skills and qualifications that will help you navigate the dynamic and fast-paced financial markets. As a result, a job in the derivatives market can be very demanding and stressful but also offers lucrative compensation and growth opportunities.

More Articles

Top 3 Strategies to Navigate a Successful Career in Global Markets

The traditional corporate structure has evolved as a result of technological advancements, process innovation, and cost-saving initiatives. While departments like HR have consolidated, technology plays a much wider role today. With increasing environmental concerns we can also observe the development of new departments like ESG, which requires interdisciplinary expertise from management, law, finance, etc.    As […]

Read more

How to communicate effectively with global counterparts – chasing front and middle office

You will often hear the same advice when asking an investment banker what it takes to succeed in the industry: being skilled at valuation, knowledge of Excel, technical skills, ability to work in teams, critical thinking, and time management. However, the one essential skill which is not always given credit is communication.  One of the […]

Read more
Global Markets

30 days challenge: Be ready for your dream role in the global markets division of an investment bank

In an investment bank, Global Markets work in tandem with corporate, institutional, and government clients to execute trades and manage risk while providing quality research content. It is one of the most lucrative divisions of an investment bank. Within this division, students can tap into front office roles such as sales or trading; middle office […]

Read more
Investment Banking

9 Stages of the Merger and Acquisition Process

If you’re an aspiring investment banker, one of the major areas you work in can be mergers and acquisitions. This is the process of companies being consolidated either through merging or one company acquiring the other. Investment bankers, in M&As, assist with crucial aspects -— valuing the companies, analysing the financial health of the firms […]

Read more

How to Get an Interview Call for a Role in Capital Markets

Capital markets are the exchange place for long-term debt between those who have the capital to lend and those who need investments. Essentially, in a capital market, companies in need of money to launch or grow their business can gain access to it through banks and investors. The most widely known capital markets are the […]

Read more
Global Markets

Converting your internship into an offer – advice from a graduate recruiter

For a keen college student looking to break into the finance industry and gain work experience, an internship is a great choice. If you manage to get a place in such a coveted program, you will get first-hand insight into a top firm within a field that interests you. The company gets to test you […]

Read more

Do You Know The Difference Between A Broker, Dealer, And Market Maker?

Many people new to the financial markets come across the terms market maker, dealer, and broker. Can these terms be used interchangeably? If not, what are the differences and the attributes needed to succeed in each of the roles? The exact definition may depend on the company you work for or the region you are […]

Read more
Global Markets

Working on the Delta One Desk

In this white paper, we will explore the background of delta one desks, who their clients are, the products offered, why clients need these products, and finally, the recent market developments in this space.

Read more
Our Courses are designed to boost your career

Launch your career with Fmi’s Learning Pathway

Choose a learning pathway that best meets your needs and ambitions. Not sure which Fmi learning pathway is right for you? Explore our CareerBuddy videos for help and advice.

Investment banking pathway

Investment banking pathway

Monthly Subscription
  • courses-clock60+ hours
  • courses-desktop9 courses

Investment banking offers many exciting career opportunities for students. From Financial Analysts to Investment Management, and Sales & Trading to a wide range of roles in infrastructure such as IT, Risk or Compliance. This pathway is designed to help you understand the investment banking industry, the roles investment banks are recruiting for, and most importantly, help you to develop the practical skills you need to get into the industry and your preferred role whether this be as part of a school leaver, intern or graduate program.

FMI Online Student join-student-img2 FMI Online Student
55,000+ students currently enrolled
Global markets pathway

Global markets pathway

Monthly Subscription
  • courses-clock70+ hours
  • courses-desktop10 courses

Global markets provide a range of important products and services to corporates, institutions and governments worldwide from executing trades and managing risk to providing quality research content. A key business area in all investment banks, global markets offers a wide range of career paths for students to consider across all functions and at all levels from school leavers to internships through to graduate programs.

FMI Online Student join-student-img2 FMI Online Student
85,000+ students currently enrolled
Asset management pathway

Asset management pathway

Monthly Subscription
  • courses-clock50+ hours
  • courses-desktop8 courses

The asset management industry is a global industry worth over 100 trillion US dollars. It plays a crucial role in managing the assets of retail and institutional investors, offering a wide range of exciting careers in doing so. If you’re looking to forge a career in asset management, our Asset management pathway is perfect for you. We help you build the skills all asset managers are looking for and explore everything you need to know about the industry and the wide range of roles available in the sector

FMI Online Student join-student-img2 FMI Online Student
100,000+ students currently enrolled