It’s weird, but I really can’t explain the love I have for this game. The money that comes from trading is certainly rewarding but there is an internal driver that means something. You could pay me more money to do something else and I just wouldn’t be able to do it.
The first time I realized that I was actually a consistently profitable trader, it was a feeling I couldn’t explain. I looked at the P&L reports and realized it was 9 months straight of profits with solid drawdown control and large sample size (lots of trades).
It was like “damn I could really do this”. From that time I traded well, made mistakes and grew from them. All which helped mold me. So much time and love invested in this craft, I couldn’t even imagine leaving that feeling.
I spoke at a university recently and I was asked “what would you do if you were not a trader”.
My answer definitely got a chuckle out of the kids but the faculty didn’t seem amazed.
The truth is, as much as I value an education and appreciate a rigorous intellectual challenge. Academic hierarchy/ praise is not something that drives me.
I would love to say that I would be doing something amazing at a large company but the truth is that is a lie.
I would probably be counting cards (blackjack) in AC as I await the late night drunks that will pile in to play no limit poker.
All while running some type of code that tracks the rate of betting line shifts from events like the “women’s Bulgarian soccer league”
along with one sided betting flow on the U.S lines.
It’s as if there is this weird infatuation that is tied to the art of speculation. As traders we are all gamblers, but the art of quantifying this approach and selectively executing on it is a fascinating game.
I love the idea of playing against a counter party and using their gameplan to help execute my own.
Maybe one day I’ll figure out what this weird quirk is, until then, I’ll gladly continue to enjoy what I do best for my investors and myself.
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Interestingly enough, the largest vol events did not come from a cheap smile or a rich smile. The smile always was in an area that signified "not too rich" "not too cheap" on a historical lookback. Why is that ?
Here's the reality, the largest blowups come from two-way price action, not directly from one way flow. What the heck does this mean?
Lets take cov-19 for example. Positioning on the street was one sided as there were a ton of hidden basis risk with vol sellers.
When I was a kid trying to get a gig on Wall Street a lot of firms pushed me to the side. But there was one firm that really believed in me, encouraged me and played a big role in my development (even though I never worked there).
This firm is First New York. I am fairly familiar with the culture and the type of traders they push out. Lots of core solid cold blooded killers such as @moreproteinbars and others.
But there was one trader’s story that just always stood out to me. If you guys ever read the last Market Wizards book, the story of Jimmy Balodimas is an extremely unique one.
Balodimas was a trader at FNY who was profitable for years trading an extremely difficult strategy.
”I love being long convexity but it would be better if it came cheaper. We are left trying to be creative using the vol surface or relative value relationships where we can”
Bingo !
The time to be long outright vol are on those days where vol of vol is getting destroyed and nobody wants to touch it. When you are faced with these environments (rising vol) it becomes much more difficult to structure things with value.
Having potential investors and trading friends reach out to hear my thoughts on current market state. I thought it would be helpful to share with you guys.
I hate engaging in the fear mongering nonsense, especially with the Evergrande situation being such a "hot topic" 🙄
anyways, there def was some impact from a positional standpoint going into Opex. This coupled with the fact that people are fearful about the knock on effects of the defaults in China are clearly moving markets but I personally believe there is something more relevant brewing.
The debt ceiling vote has a larger impact directly on the U.S and seems to be something a lot of folks are overlooking.
Yellen came out over the weekend stating that the Treasury's cash balance will be insufficient as of October.
Idea generation is so important. I believe the best forms of alpha stems from regulatory / structural / legal implications.
I believe that the understanding of these factors and the changes that come along with them lead to alpha.
Understanding things like TRACE reporting is crucial when you are trying to identify agents and the moves they are making.
This market has become so complex. Betting a stock will fall because it has bad earnings is just a rookie’s playbook.There is no direct edge in those plays
Can you think about the recent changes in the microstructure that would be impactful to the overall picture.