A generalisation is that anyone can trade but you have to be seriously good to be an options trader. Options or derivatives are a dark art, Warren Buffet has described them as "Weapons of finance destruction" the reason for this is that they are geared fianancial trades and so if they go wrong or right they do it a dramatic fashion.

Options traders trade volatility, they do not care whether the market goes up or down as long as it continues to do both, as often and as violently as it likes if they are long volatility and completely the opposite if they are short volatility. Options traders measure volatility on a historical basis but also on an implied basis, this is in effect back calculating where volatility is according to where the market for premia are. These calculations are very complex and the most used formula ended with the creators getting a nobel prize. In fact the options formula contains some references to measuring rocket trajectories using Eto's calculus, perhaps options trading is rocket science.

Many risk models look at volatility which shows the probability of a market movement, if the market has moved £30 in a week, then there is a certain probability that it might do it again, irrespective as to whether we are at new highs or lows. Financial models in the city have recently included a rare volatility blip the one caused by Sept 11th. This blip has caused models to hold back release of risk capital, but the expectation is that after five years the blip will be removed from the models freeing up more capital. The release of capital can be what can cause the bubble mentality, and players must guard against being too risky with their risk capital.