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The stock market gives individuals many options for buying, selling and trading assets such as stocks, bonds, commodities, securities and options. Because investing in these types of assets, especially options, takes specialized knowledge and experience, many investors count on options traders to help them navigate the process. While licensing and registration are mandatory for all traders and brokers, options traders can earn certifications to give them legitimacy in the field and additional knowledge about trading options.
Options trader certifications come from several different sources, including companies that specialize in providing certifications, such as Expert Rating and the Online Training Academy. Training and certification also come from industry associations, such as the Options Industry Council. Certification providers often bring in options trader experts who work in the field to lead the programs and courses. This gives the certification candidates the most current information and knowledge about this specialty.
Certification for options traders typically involves taking a class, passing a test or a combination of the two. The topics covered in the classes and exams vary from provider to provider, but generally they include subjects like options terminology, managing risk, technical analysis, trading strategies and portfolio management. Other topics include profit and loss diagrams, time value, vitality analysis and developing options trading strategies. Because certification programs provide a comprehensive look at options training, they can help traders wanting to specialize in options trades, as well as those traders who want to add options to their other services.
Certification candidates must register for the programs, which usually happens through the provider’s website. Most certification programs incur a course, exam or application fee or some combination of the three that the candidate pays during registration. Some certification providers allow the options trader to retake the test at a discounted rate if he fails or if he just wants to get a better score. Others require candidates to fulfill prerequisites before taking a certification program. The Professional Options Trader program from Online Training Academy, for example, requires candidates to take parts one and two of its professional trader course before taking the professional options trader course.
Courses and Testing
For certifications that require passing a test, the exam may be a traditional pen-and-paper test in a classroom setting or it may be done online. Typically, exams consist of multiple-choice questions. Courses take anywhere from a few days to a few weeks to complete, with the certification test coming at the end of all the classes. Depending on the provider, some certification classes feature a hands-on training portion in which the students receive real-time trading practice.
While earning options trading certifications is typically optional for working in the business, all traders and brokers must register with the Financial Industry Regulatory Authority, as well as the National Futures Association. Registration and licensing with FINRA requires passing an examination in one or more series. Options traders typically register under series 3, 4, 7, 9, 10 or 42, depending on the types of trading they will be doing and the level of employment they will have. Registration with the NFA requires completing an application, undergoing fingerprinting and a background check, meeting the qualification requirements and paying an application fee. NFA registration also requires taking the FINRA series 3 examination.
- Bureau of Labor and Statistics: Securities, Commodities and Financial Services Sales Agents
- Expert Rating: Options Trading Certification
- Online Training Academy: Professional Options Trader
- Options Industry Council: Education Program Overview
- Financial Industry Regulatory Authority, Inc.: Registration and Examination Requirements
- National Futures Associations: Registration
- Monkey Business Images/Stockbroker/Monkey Business/Getty Images