A little about me: I got started in the volatility trading business about 13 years ago, initially as the sole junior trader to Robert Kanter. From there, I went on to trade at several proprietary trading firms. After having the best year of my trading career, about six years ago, a few partners and I decided to start our own hedge fund. I like to think I’ve established myself as one of the top volatility traders in my space. Along the way, I’ve been fortunate to receive a few industry awards, recognition, and backings for what I’ve been able to accomplish throughout my career as a trader. My focus on this app is pretty simple: to have interesting discussions with other traders and PMs, help younger traders navigate their own journeys, and share some of the volatility trading philosophies and lessons that have served me well throughout my career.

This is a heuristic I learned early in my career that has saved me a good deal of money. Generally speaking: If you are short an asset and it experiences a stream of negative news that fails to push the asset lower, get out. If you are long an asset and it experiences a stream of positive news that fails to push the asset higher, get out.

No statistical measure has inflicted more losses than Z-score

Throughout my career I’ve seen this same archetype of a person hundreds of times. They were all on the trading floor 😂

Over the last three months, there has been a repeatable and extremely sizable footprint in the /ES market that consistently comes in and drives equities lower. The flow has a very specific execution pattern. They pile into the order book, aggressively taking liquidity tick after tick through what looks like a compressed TWAP. The price impact is immediate, and the pressure tends to remain heavy throughout the moment they turn the program on. In some ways, it resembles forced or margin-related selling (waterfall like selling), despite the fact that it clearly isn’t. When they release from the orderbook, the market slightly bounces and then trades in a small range for the remaining part of the day. There’s other execution tendencies this end user has. I won’t list out all for obvious reasons but at this point I’m sure a lot of traders are seeing this. What makes it particularly interesting is trying to conceptualize what type of shop could be behind it. There are very few firms in the world with a balance sheet large enough to consistently trade this kind of size and execute in such an elementary manner. And no it’s not due to gamma or delta hedging. It doesn’t behave like a traditional equity derivatives dealer that would be hedging out delta/ gamma risk. The execution is less sophisticated, and the footprint tends to have a strong cross-asset relationship with moves in rates, which isn’t typically what you would expect from an equity derivatives market maker. It’s not a vol control fund, it’s not a pension or endowment. Which narrows the list down for those with a creative mind. These things end up making headlines weeks or months later. Whatever this flow is, it’s truly fascinating to watch this footprint reappear every few days with such force, consistency, and lack of care to hide their impact. I’m not sure I have ever seen a flow like this while markets are so close to all time highs.

I think as agents become increasingly sophisticated, it will become much easier to reverse engineer the footprints of specific market participants. Beyond the broader trading opportunities this creates, I think you’ll start to see firms with real, differentiated alpha become more reluctant to operate through SMA structures, despite the industry’s significant push toward SMAs over the last decade. The same dynamic could change how PMs approach pod platforms. If your trading activity can increasingly be analyzed and your IP inferred, PMs with genuine alpha will likely place a greater premium on longer-term agreements, stronger capital commitments, and greater protection around their strategies. The broader point is simple: transparency around proprietary IP will likely become more limited at precisely the same time that the tools available to uncover that IP are becoming dramatically more sophisticated.

“God’s on the throne. Football don’t define me… Even if I never win another game, God is still good.. My peace comes from knowing that God’s on the throne.” - Clemson HC Dabo Swinney when discussing if he allows himself to feel the eternal pressures

Wall Street Dress Lore: Today, finance bros are synonymous with the traditional firm-sponsored vest or Patagonia. It has become such a stereotype that mainstream media has basically labeled the look “cringe.” But the vest actually has some real Wall Street history behind it. When I was coming up in the business, as corny as it sounds, I desperately wanted a trading vest. Around 2011–2012, you started seeing more and more firms roll them out, and one thing was pretty apparent: traders wore the vests. Back then, it almost served as a delineator between someone who worked on a trading desk and someone who simply worked in finance. As a kid who was completely enamored with this side of the business, one of my early requests when joining certain firms was that a vest be included in my new hire package. But the vest didn’t originate as some random fashion statement. Go back to the open outcry era of the NYSE, CBOT and CME pits, and traders were famous for their brightly colored trading jackets. Over time, as trading moved away from the physical floors and onto screens, the industry’s uniform naturally evolved too. The suit and tie became less practical on trading desks, and fleece vests became part of the new uniform. But the firm that really helped turn the fleece vest into a modern trading floor staple was SAC. Steve Cohen was famously obsessive about the environment of his trading floor. The idea was to eliminate distractions and keep traders completely locked in. The floor was reportedly kept cold, phones used soft-touch keys to minimize noise, conversation was limited, and SAC branded fleece became part of the culture. And at the time, Cohen was one of the most influential figures in the hedge fund world. SAC alumni spread throughout the industry, other firms adopted pieces of that trading culture, and the vest began spreading across Wall Street. Eventually, it escaped the trading desk entirely. What once had a fairly specific association with traders became the unofficial uniform of finance: hedge funds, private equity, investment banking, wealth management, fintech, you name it. So yes, the finance vest is played out. It’s cliché. It has been memed into oblivion. But I still love it. And I still wear one.

Also, if I’m ever slow to respond to anyone’s texts, emails, DMs, Twitter replies, etc., please don’t take any offense to it 🙏🏾 Between team messages, peers in the industry, investors, my fiancée, godchildren, siblings, friends, training buddies, charity requests, my mother, relatives, and everything else in between, the list gets pretty long. Sometimes messages simply get lost in the shuffle, and I have to slowly work my way through the stack. It’s never intentional or personal. For context, this is what the message stack on my phone looks like right this second. Being completely human, it all becomes a bit challenging to juggle and things fall through the cracks.

Hey everyone, I’ve been getting some emails about this. I haven’t gotten back to anyone yet. My plan is to slowly work through this in the coming weeks/ months. This is a personal project of mine and unfortunately things have been super busy (trading/ running the business / etc). So if you haven’t heard from me, don’t think anything of it. Slowly but surely working through all of it🙏🏾 Enjoy the weekend!

To rise to the top in your area of work, there is one simple rule: Work very hard, over a long period of time. - Most people don't want to work - Few want to work hard - Fewer still will work hard over a long period of time Elite = Doing Uncommon things

BOOK THREAD: Trading / Volatility (No particular order) 1) Trade like a casino: This book reinforces the core focus of what trading really is. Finding an edge and hammering it away 2) Trading volatility: If you want to learn about volatility and structures, this is a great starting place 3) The Volatility smile: Continuation of volatility topics 4) Dynamic hedging: This book is tailored towards portfolio management, it gets into third and fourth order greeks (shadow gamma etc) and how that can shift a complex derivatives portfolio 5) Positional option trading: Actually gets into trading options and what a trade with edge looks like 6) 🚨 Series 57 Exam Knopman prep: If you want to learn about market microstructure, order types, exchanges, routes, institutional regulatory rules, what actually goes on in an order book etc this is it 7) Best loser wins: This is a recent favorite of mine. The book gives real psychotherapy practices on conditioning yourself for real trading and the emotional swings you will experience 8) Trading in the zone: Good affirmation around core principles 9) Fooled by randomness: Every starting quant should read this. It’ll save you a lot of time from falling into stat traps that will occasionally appear throughout your career 10) When genius failed: Nice story time read 11) Man who solved the markets: Nice story time read 12) Inside the black box: Absolute must read for a quant. Gets into practices around cleaning and sourcing data. Also discusses good habits such as making sure you keep an honest out of sample etc 13) The misbehavior of markets: This book will change any expectations you have towards markets. It’s a reality check to help you prepare for what is inevitable 14) The mental game of poker: More affirmation around thinking about edges and the emotional swings you experience as you go through the variance of a strategy’s P&L 15) Rise of carry: This is the only financial book on my TV stand. It’s a huge fav. It simply discusses how and why the financial markets are all levered long into the same trade. Structurally, there are reasons why black swan events are more likely to occur, this book tackles that 16) The laws of trading: Great framework around trading as a business and a realistic guideline to help you manage your expectations 17) Unknown market wizards: nice story time read 18) reminiscences of a stock operator: You can learn what to do, by understanding what not to do. This book gives you the blueprint for that. 19) High frequency trading and probability theory: Amazing breakdown on Stochastic processes and how they fit into both a maker & taker system. Also nice touch on testing and applying stationarity and semi martingales. 20) Volatility trading: nice starting block for understanding options

This whole saga is a textbook lesson on why you don’t let the market sniff out your footprint or get into the inner workings of your strategy. Because once you do, you practically become a duck that has to fight a whole ecosystem in order to win.