To The Moon

I’ve been narrating my small GME trade this week through this substack and twitter. On Friday I rolled my short June 20 calls to the 25 strike. I narrated my thinking on twitter but I’ll re-print it here. It’s a combination of real-time thinking and some meta-thoughts about trading as well. Sharing my monkey thoughts as i mess around in GME… I’m long that 20 lot of June 20/30 call. Rolling the position Despite the stock being down today, the 30s are eroding as vol is declining so the spread actually upticked in value. I’m also looking at the june 20/25 call spread: From my IB montage The spread value has increased a lot. The vega on these options is small but not totally negligible. Look at the IV spread…it’s fallen 14 points today on a spread with a pen

The lingua franca of asset management regardless of strategy is returns. But this is not necessarily true in trading. In my own 21 years of trading, it was never even brought up internally. It gets mentioned somewhere far in the background. In vague terms at best. And even then, the context is more of a hurdle than a target. We’re going to talk about this in 2 parts. Today I’ll walk through what this meant in the 3 phases of my career (with plenty of color interspersed): Being a market maker at SIG Running my own market-making group financed by a Chicago firm that backs traders As portfolio manager within a relative value volatility trading hedge fund. This last job was for an entity that was backed by LP money and therefore beholden to the concept, language, and deliv

Gather round. Let’s just chop it up in no particular order. On Monday, I fired off an impromptu email with a trade I was doing. Disclaiming of course that it’s not a recommendation. I have no licenses and I’m not qualified to give financial advice. Buyer beware and all that. I sent it to paid subs only. Actually, let me clarify the paywall. Last year I added some paid tiers on Substack. It was like $150/yr. There was also a $500 annual OG tier. For $150, it was just a chance to support the letter and OGs had that satisfaction plus a Zoom or IRL chat if they wanted. In other words, there was no extra content for paying. It was just a tip jar. I support other writers even if the content is free so I understand the impulse. Who am

Just popping in on my writing break to share a 1 lot… 🎙️Stripe’s John Collison Recently Interviewed The Late Charlie Munger (Invest Like The Best) Loved the rapid fire format. RIP Charlie, a true legend. I’m hesitant to put my favorite excerpts because it’s no substitute for listening to it, but I’m going to anyway to make it easier to quote from in the future. Excerpts Did you learn the big ideas in the various disciplines because you were just intellectually curious about them? Or because you thought they’d be instrumentally useful in the work? Both. I saw instantly, for instance, when I was introduced to the math of Pascal and the eleme

Just popping in to share my notes on 2 books. The links go to my notes. More Than A Numbers Game: A Brief History of Accounting by Thomas King Advanced Portfolio Management by Giuseppe A. Paleologo I picked up these books because of an interest in the practice of “measuring correctly”. Context always governs what “correct” means. A quote by Paleologo the opens Chapter 8: Understand your performance The Earth rotates around the Sun at a speed of 67,000mph. When I go out for my occasional run, my own speed is in the tens of thousands of miles per hour Should I take credit for this amazing performance? I w

In year 5 of this online writing adventure, I will continue my annual tradition of shutting down for the holidays. I get to recharge that particular battery and readers who complain that they are behind can catch up if they so care. This post is an organized recap with a few “user notes”. Personal Favorites The Worst Game Ever Made: This was a journey down the rabbit hole of Georgism which I basically think is the platonic ideal of capitalism. California’s eventual future, with its disparity between haves and have-nots, is a Central American country with drug-lords digital addiction merchants’ compounds surrounded by beggars. It is also glaring to me that it is the epitome of anti-Georgism with a tax code th

Find the audio here. When I was 22, I thought I hit the jackpot with my job. After bonus season, management took the entire firm to Las Vegas. It’s still a weekend that looms large in my memory, not only because I got sun poisoning but also due to the sheer over-the-topness of it all. There was one moment when I was sitting in the basement of Drai’s at a table with the older traders and one of their friends — the friend was Vin Diesel. I mean, this was Vin pre-Fast and Furious, but still, I had never been to Las Vegas before, and my first impression was pretty overwhelming. It was also peak. What I didn’t understand was that all of this was a one-time dividend. I’m going to talk about what I didn’t understa

Episode link: https://www.thealphamindpodcast.com/117-susquehannas-todd-simkin-great-traders-are-made-not-born/ About the episode: In this episode, we had the privilege of sitting down with Todd Simkin, currently the CEO of SIG’s Reinsurance business and a veteran at Susquehanna since 1997. Todd has played pivotal roles within the company, from being a trader to overseeing the day-to-day operations and even spearheading firm-wide education and trader development programmes. Todd is possibly one of the pre-eminent minds in the world of trading, possessing a deep understanding of what contributes to the making of great traders. We were honored that he was willing to converse with u

Idio I just started reading Advanced Portfolio Management by Giuseppe Paleologo. About the author He’s on garden leave after running risk at Hudson River Trading. He has also held senior positions at Millennium, Citadel, Axioma, and IBM Research. He was formerly a mathematical researcher at Stanford and an instructor in the master’s program in Financial Engineering at Cornell University. I started reading this book because I was interested in how fundamental investors think about risk and performance attribution. I heard the book was standard issue at Citadel for pod PMs. I haven’t verified that but I did notice th

The moontowermoney.com project is an approachable framework for personal investing. It competes for air with my other projects and my own scatter-brain. One might say its progress is, um, gradual. Anyway I’ve added 2 new posts recently so the Introduction and Nature of Investing units are now complete. 2 more units to go. See https://moontowermoney.com/