Hi all,I'm about to move into the front-office as an LME futures and options trader and looking for advice. I've got a fair amount of exposure to FX/commods/equity markets but have never traded vol before. Can someone please talk a bit about the practical aspects of this new task of mine? Are there any limitations other than the obvious? Does learning to trade one market mean learning to trade vol in another?ThanksN

You say you are moving into front office, but you also say you have had exposure to several markets? So you've had trading experience before then? Or you have experience with those markets from being a quant? In a few ways, LME trading is rather particular compared to other commodities, so knowing a bit about the LME would be an advantage. Also, my experience people with experience on trading futures don't necessarily do well when trading options (and vice versa). So having trading experience before can be a good or a bad thing... If you have more specific questions, feel free to ask (or PM them) and I can comment more.

Hi Bram,Thanks for the response. Im working as a market risk manager at a physical commods trading house, but did a few internships within sales and trading - so in some ways my exposure to metals trading is the most limited. I have no trading experience of both options and future, however, the job will be heavily dependent on both instruments.I know so little about how they mark their vol surfaces and how they handle far out of the money positions. Do they use conventional techniques to model and trade the surface? Is it possible for them to trade around/arb the vol surface? Why does learning to trade futures affect options trading, and by trading commods options don't you learn how the futures curve works (or does it not apply when you're primarily just hedging with futures)?

bump

"Do they use conventional techniques to model and trade the surface?" Why not ask the traders? To my knowledge, there is no "conventional" way to model or trade a vol surface. There are multiple ways to approach the problem depending on your competitive position in the market and the asset in question.