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What does an Options Broker do?

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  • Written By: Ben Taylor
  • Edited By: A. Joseph
  • Last Modified Date: 17 November 2016
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An options broker provides a variety of investment-related services for individual investors. People or organizations looking to invest in stock options employ the services of an options broker for services such as investment advice and interest-bearing accounts. The primary duties of an options broker, however, is to act as an intermediary between the investor and the options market.

After the individual investor and the options broker agree on the best stock option in which to invest, the duty of the broker is to electronically transfer the order to the floor of the securities exchange. Once the transaction has been confirmed and finalized, the broker collects a commission on top of any established base payment. The most important thing an options broker does, however, is procure clients and build a dedicated customer base.

Options brokers who are just starting out could very well spend most of their time finding new clients for their firm or for their individual operation. The turnover rate for options brokers, and virtually all securities brokers, is rather high. Those who do stick it out, however, tend to be attached to their job because of the high salary and considerable investment in job-specific training.

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To work as an options broker, it is important for someone to first have a college degree or some background in finance or investing. Options broker jobs don't necessarily require college degrees, but a bachelor's degree could prepare someone for the job. In fact, most positions require a bachelor's degree in finance, accounting or economics. For advancement into higher-level brokerage positions, it might be necessary for someone to have a master's degree or other post-graduate professional citation.

Options brokers should be registered with the applicable regulatory bodies or government agencies where they want to do business. Many firms looking to fill broker jobs emphasize industry experience over formal education. Many senior brokers have five years of experience, and others have seven to 10 years experience.

Securities brokers, including those with options broker duties, also keep pace with advancements in the financial services industry in order to better serve their clients. This involves professional development conferences and training seminars. Their work is closely related to the whims of a stock market and large banking operations, so most of the major investment banks and brokerage firms are based near very large cities around the world, such as New York. About 15 percent of all brokers are self-employed, and nearly half of the brokerage industry works in securities, including stocks and derivative investments such as stock options.

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