Tim Weithers Insight Into Trading Derivatives

Last week during Finance and Investment Group (FIG) professional event, Tim Weithers, executive director at Chicago Trading Company was here at UIC to talk to students about derivatives markets. He is also the author of “Foreign Exchange: A Practical Guide to the FX Markets” which was published in August 2006.

Mr. Weithers received his PhD in Economics from University of Chicago. He started working as an Assistant Professor at Fordham University in New York. He then started working for the O’Connor & Associates at the Education Department, which is now part of UBS.  He left UBS as the Managing Director in late 2006 and worked as an independent expert witnessing at the Federal Reserve for a while. After some “fun work” at the Fed, Mr. Weithers joined Chicago Trading Company. He was also professor at the University of Chicago Financial Math Program for more than 10 years.

During the presentation we learned about CTC, the “players” in the financial markets, different types of derivatives, market makers and some interview tips.

CTC: It “is a proprietary trading and market-making firm in derivatives (primarily options) contracts with headquarters in Chicago and offices in New York and London.” The company trades options contracts on stocks, stock indexes, energy products, precious metals, foreign currencies, agriculturals, treasury and interest rate instruments. The company trades at a lot of places including Chicago Board Options Exchange (CBOE), Chicago Mercantile Exchange (CME) Chicago Board of Trade (CBOT) etc.,

“Players” in the financial markets: Big players in different financial markets. For example the big “players” in Investment Banks are Goldman Sachs, JP Morgan, Citi, UBS.

Derivatives: We were exposed to different derivatives in market like Options, Futures, and Forward contracts.

Market makers: “A trader or trading firm who is prepared to both buy and sell contracts in the marketplace.”

Interview Tips: When going for an interview be prepared to answer the “predictable” questions like, why us? Also, know facts about the market and keep up with the news. When asked about a mathematical question like "Which is bigger if x < y: x^y or y^x ?" Think out loud. Talk about what is going through your mind and how you are analyzing. At the end of the interview ask the interviewer a question about their company or something related to them.

By the end of the presentation we also learned about the famous “Monty Hall” problem on which door gives you more probability of winning the prize behind the doors. If you are passionate about a job related to the options market explore internships or employments opportunities at CTC or one of the other derivative trading and market-making firms.