The Derivative - Retail to Institutional: How David Sun Scaled His ODTE Options Strategies

Episode Date: November 7, 2024

In this episode, Jeff Malec sits down with David Sun, an entrepreneur, trader, and fund manager with a unique journey into the world of options trading and alternative investments. David shares his unconventional path, starting as a retail trader experimenting with options strategies, particularly selling puts, before transitioning to professional fund management. He discusses the challenges and lessons learned as he navigated various market regimes, including the 2018 and 2020 downturns. The conversation delves into David's systematic approach to options trading, focusing on risk management techniques like stop losses and hedging strategies. He explains his evolution from primarily selling options to incorporating more option buying, as well as his exploration of zero days to expiration (zero DTE) options and the unique risks and considerations involved. David also shares insights into the role of behavioral biases in the markets and how he leverages data-driven research to develop robust trading strategies. He reflects on the increasing accessibility of trading tools and resources, and the valuable contributions of the retail trading community. Chapters: 00:00-02:08=Intro 02:09-09:21= Engineer to Retail trader to Fund manager – an unconventional path 09:22-18:21= Don’t quit your day job & Option-based fund management 18:22-26:09= Mitigating gamma risk in short-dated options & Focusing on the win rate 26:10-35:47= Exploring behavioral biases and combining systematic & discretionary styles 35:48-45:39= Democratizing trading: Hedging, Volatility, Trend, and Broken butterflies 45:40-57:11= Sharing knowledge and resources: The Trade Busters podcast & bridging the gap 57:12-01:07:18= Naïve to Trends, momentum, edge? & the human behavioral bias From the episode: Fooled by Randomness (Book) The Derivative episode: WTF?! Will 0DTE Cause Gammageddon? With Mike Green and Craig Peterson Smartless podcast   Follow Along: Follow along with David on Twitter @TheTradeBuster and also be sure to check out The Trade Busters podcast Don't forget to subscribe to ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠The Derivative⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠, follow us on Twitter at ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠@rcmAlts⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ and our host Jeff at ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠@AttainCap2⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠, or ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠LinkedIn⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ , and ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Facebook⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠, and ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠sign-up for our blog digest⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. Disclaimer: This podcast is provided for informational purposes only and should not be relied upon as legal, business, or tax advice. All opinions expressed by podcast participants are solely their own opinions and do not necessarily reflect the opinions of RCM Alternatives, their affiliates, or companies featured. Due to industry regulations, participants on this podcast are instructed not to make specific trade recommendations, nor reference past or potential profits. And listeners are reminded that managed futures, commodity trading, and other alternative investments are complex and carry a risk of substantial losses. As such, they are not suitable for all investors. For more information, visit ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠www.rcmalternatives.com/disclaimer⁠

Welcome to The Derivative by RCM Alternatives, where we dive into what makes alternative investments go, analyze the strategies of unique hedge fund managers, and chat with interesting guests from across the investment world. Hello there. Hope you're doing okay following the election here in the U.S. A bit of a pall of gloom over Chicagoans, to be honest, even with those U.S. markets screaming higher the day after the polls close. Anyway, hang in there, or don't celebrate too much, depending on your side of the vote.

It's usually never as bad or as good as it seems. On to this episode where we chat with David Sun, who went from retail options trader to running a small fund. David has some interesting takes on how and why he approaches options trading and zero DTE the way that he does, including the idea of whether he'd be better off not learning any more about it for fear of removing what makes him different than others. That's a new one. David talks about his custom metrics for measuring the risk return profile use of stop losses and we debate whether volatility risk premium is an edge or just a factor whether it even matters send it this episode is brought to you by RCM's managed futures group

looking at vault traders like David or emerging managers like David it's a bit of both question about why one program another perform the way it did give our team of specialists a call and get the inside scoop on dozens of funds and CTAs we work with. Visit rcmalts.com to learn more. Now back to the show. all right everybody we're here with david son david how are you hey i'm good jeff thanks for having me on yeah david is entrepreneur slash trader slash fund manager slash podcast host wearing a lot of hats yeah you have the most common zoom background but you're not actually in the barrier right that's correct yeah i'm in the east coast i usually have that the outer space one but then people always joke oh you're calling from space but you know uh love it where are you

in east coast i'm near the capital in virginia all right um so let's start a little, you kind of have a unique entree into this space, having been a retail trader basically before you started doing it professionally. So talk a little bit about that journey if you could and what made you think you could do this for real? Yeah, sure. So I don't have any formal finance background education or pedigree if you will actually my background's in electrical engineering i was doing my master's at princeton this was around 2008 2009 so interestingly you know even if you weren't into finance right the market was probably on your mind around that time during the gfc so i just kind of thought i might get into you know trading stocks and not

you know i had no idea what i was doing i was watching mad money jim cramer and uh and just you know just just picking random stocks and so i had a friend there that in princeton that knew about options and he was like why why don't you try options? So the interesting thing is like, so I got into options very early. I didn't really do a lot of stock trading or day trading, if you will. And not only that, he got into me, got me into options through the idea of selling options. So I didn't have that first step that people usually make the mistake. We're buying options and trying to make big bets leverage bets and you know and fighting theta and all that

so selling put writing was basically what i started with now granted there was not really anything scientific back then either it was literally okay instead of picking the five stocks that kramer talks about on on mad money sell puts on those. And super naive, just looking at the option chain, selling the monthly and be like, oh, you can get 1% for a month. And okay, if I just do it 12 times and if I roll it when I'm challenged, you get 12% and it seemed easy.

Good time to be selling puts after the crash. A good time to be selling puts. So of course it worked for a couple of years, made a decent return. But again, like eventually the market turns and things kind of, I didn't blow up, but it was like, oh, this is not so easy. So it kind of took a little bit of a break

just because it was like, I think I bought my first house. So I took some money out. But I had a friend who he knew I was into options. And he actually had some money, I think was managed by like Morgan Stanley or something. I forget who it was, but he wasn't happy with how it was going. And he was like, hey, can you try to get back into this and learn, learn again? And so we can kind of learn together?

And so I was looking at a lot of different online content for mostly retail-oriented stuff, the Tasty Trades, Option Alphas, and really kind of just doing a DIY, but learning as I went, engaging with other online communities. And there's a lot of sophisticated retail traders. I know they kind of get a bad rap, especially if you look on like TikTok or YouTube,

all the kind of like the trash videos and, you know, if you will. And you're kind of coexisting at that time with the Wall Street bets and all that stuff too, right? Personally, I never did because I wasn't into Reddit, but I knew about that space. But so there was a lot going on, connecting with a a lot of people kind of learning and honing my craft and just getting you know you know finally learning the greeks um and so this was around 2017 that i kind of really found my footing uh year and a half later you know you asked me about how i got the idea of starting a

fund and how i thought i could do you know i don't know what got into my head it was just like okay i'm having some success and it seems like if i could raise some money i could be doing the same thing i'm doing now just trading larger account right using other people's money and my money and you know getting paid right because trading is kind of like the ultimate or just asset management, like the ultimate scalable business. You just get more money and you get paid and you're basically doing the same thing. I mean, maybe that's a little reductive. Obviously, there's more involved in that.

So I launched my first options-based fund around late 2018. It's interesting because the timing was great. I launched October 2018 right into the next sell-off. This was kind of the December 2018, right? Yeah. I forgot what it was. Something with, I think it was interest rate related, but Mark had a big sell-off.

And the volatility actually went down that Decembercember right so the market crashed in the year mini crash yeah yeah exactly um yeah a lot of people we've had on this podcast had a tough december of 18 definitely and in 2019 another stroke of luck market recovered got that redemption arc funded well and then of course 2020 happened in covid and so you know and in 20 you know interesting 2021 market rally 2022 and so there was so many different market regimes that basically happened it was like three bear markets in the space of six years so it was a lot of good learning experiences, just enough to learn the lessons, but not so much that, you know,

went under or blew up. So I think the timing was very fortunate in that case that like was able to like, just get through all of these different experiences and really make the most and, and get a lot of takeaways. And that's always, you talk to a lot of option people like,

Oh, I've tested this, right. The strategy through X, Y, Z, you're like well how often right is it statistically significant for those events that have only happened a handful of times in 40 years um yeah exactly statistically significant to test those into your model at all yeah it's it's it's hard to say because like better to live through it yeah live through it and of course you want to test through it as well because you kind of want to know what those periods of stress are and i know we'll talk about probably august 5th and a little bit here but that

was just another never seen before kind of event right confluence of a lot of different different things but just to kind of finish the story so 2021, we spun out one of our strategies, we're just focused on zero DTE SPX. And we just made a kind of a zero DTE focused fund. And that was 2021. So I've been running two funds since then. And then here we are now, five, five and a half years later. Take me a little bit through that, like, so we're surely with some nervousness there right i'm like managing other people's money or did you were fine with that mentally right i think it is ultimately scalable it is an easy transition instead of doing two contracts you're doing 22 whatever the case might be but a lot of people can't handle the the mental anguish right of

like oh i just lost ten thousand dollars for my uncle or whatever the case might be but a lot of people can't handle the the mental anguish right of like oh i just lost ten thousand dollars for my uncle or whatever the case might be like how did that work out with you you were fine with it you know i'm either super naive or overconfident but the way it played out we started with you know i seeded it with my personal capital and it was very little other people's money at first. I kind of did the thing where I had an incubator set up, but then I felt like a track record with real, you know, LP funds, even if it's a little, it's kind of different than an incubator track record with just my own money i don't it just feels different so i went ahead and launched i was basically not covering my expenses i was paying out of pocket right and that was the case for two plus years and so i guess there wasn't a lot of other people's money to like be worried about i guess and it was mostly

just grinding trying to trade the strategies and still capital raising at the same time. And it's kind of the typical, you know, hear about a new business, right? The three-year trajectory is like a two or three-year grind until you kind of hit that escape velocity and actually get enough funds to first cover your costs and be profitable. And then it kind of just took off from there. So again, maybe just kind of that timing aspect, it just worked out that way. I was able to kind of just took off from there. So again, maybe just kind of that timing aspect, it just worked out that way. I was able to kind of get through the lessons

without having too much other people to worry about and getting calls and stuff. And I found my footing and everything kind of just worked out that way. What would your advice be to other people trying to do the same thing? Don't quit their day job. Keep a funding source on the side and then let this grow and

when it when it hits it hits i would say that definitely helps if you have the luxury of some kind of job that has uh flexibility um and you know if you're gonna be trading like it depends what you're doing if you're doing if you're day trading you have to watch the screen that's totally different but we're mainly automated, systematic trading. So during the day, there isn't much. No, we're not watching the screen per se. If there's some kind of risk we've got to manage, we'll get an alert or something. But other than that, I think most of the work was asynchronous to the market hours.

It's backtesting, doing research, setting up calls or whatever. So you can manage that but i think if you have to depend on your fees as your sole income it's gonna like lend kind of this i don't you never want to be desperate but like you have to make profits to to feed yourself because that's going to change how you approach you know your trading and so much of training success is based on conviction and discipline and so you you have to be able to to manage those emotions and it's not going to help if you've got this other thing like hey like i i need this you know need this gain or else i'm not gonna campaign for the wedding or whatever right yeah the um and what was that so you said at

princeton what was your education in so it wasn't in quantitative finance what was that you said at Princeton, what was your education? So it wasn't in quantitative finance. What was it? No, it was electrical engineering. So nothing to do with finance. But, you know, I always say at the very least, I got I got a good grounding in math, which helps. Right. Because what we do is all kind of, you know, it's funny. Like I say, you don't even need to know calculus if you know algebra and you have kind of some basic

statistical um foundations and probability and just not really even super complicated stuff like you can you can do this job yeah it's fine we've had i should actually go back and count how many but so many managers and traders on the podcast who came out of engineering, either electrical actually itself or just general engineering, because I think their brains think of the market as a problem. Right. And we can just build the solution to fix that problem. I'll often argue, like, are you sure it's a solvable problem? Right. It might be an illusion of it's a solvable problem, right? It might be an illusion of it's a solvable problem. What do you think about that? Do you think it's ultimately solvable or you're just trying to exist in a semi-solved state? I think that goes to the idea of knowing if you have an edge. I always say when you're trading, ultimately, you just have to take what the market gives, and your job is just a risk manager.

And so this is also related to developing strategies and backtesting. People talk about curve fitting and whether or not you're just fooled by randomness. That's what I thought of when he said, is it a solvable problem? We're fooled by randomness, right? And the idea is, I think there's some core principles. We rely a lot on what options is volatility risk premium and there's a lot of literature and reasons why that exists right but you have to fundamentally believe that there is some edge in overpricing of options now that can be used on

the sell side or the buy side um and then there's you know whether or not this equity risk premium or or positive drift by market go up long term are you taking advantage of that and of course like factors like momentum and trend which ultimately i think go back to behavioral biases where there's reasons for that momentum and trend exist that's rooted in either information not being propagated immediately or there's emotion you know people are greedy or fearful and so they either buy too much or they sell too much. And so there's reasons and kind of drivers behind these ideas. And for us, we always want to distill our strategy back to,

we believe there's this edge here. So when we say solve the problem, right, we're not trying to create some additional source of edge that's like not known. But we're just trying to kind of manage our risk, right? Develop strategies that can take advantage and harness those edges without taking on, you know, huge risk. And so solving the problem is really just surviving. I guess that's where it comes down. If you can survive, then that's for us is solving the problem is really just surviving i guess that's where it comes down you can survive then that's for us is solving the problem but would you call vrp and momentum

and those edges or those just factors right they're just um i guess you know this may be partially due to the fact that i don't i that formal background, but for me, how would you differentiate those two? At the end of the day, there's some concept or some reason why there is a business model or some driver of the profit. Maybe I'm not using the term correctly, but that's kind of how I think of it. Well, then that would be a factor. This ability to take this risk and make this money is driven by this factor, which volatility risk premium. The fact that options tend to decay into expiration isn't an edge, so to speak. That's nothing.

It's well known. It's all over everyone's notes. So that would be my difference. An edge is I'm at a prop firm here in chicago i've got better technology i can put big bids and offers in on small options that retail can't match and right i'm i'm front running and all that stuff that's an actual edge where they have either pricing or information or technology and rent or in trading it right if i'm a hog trader and i know that the right with all my contacts i know that the uh supply is going to be lesser than what

comes out in the news or something of that nature that's an edge right one thing that reminds me of though so i've heard there's kind of four sources of edge right there's information as you mentioned you have some information that nobody else has it's analytical where you have the same information but able to analyze it in a way that's different or better um there's sort of a technical or like i said execution where you can just do that thing better or faster but the last thing is kind of behavioral and basically if you kind of know there's certain tendencies for humans to react a certain way and maybe that's you know related to like market flow for instance if you know there's behavioral biases you can take advantage of that but as i mentioned i think that's that

in and of itself is kind of related to vrp and even momentum and trend so maybe that's why i kind of conflated to like is that an edge or a factor so that's what i'm kind of getting at yeah i sort of agree with that right of like the act brp itself isn't an edge to be able to trade it and not blow out that could be an end right like that's what you're saying the behavioral the structural like to be able to risk manage that factor could be the edge. Right, right. Let's dive into the models a little bit to the strategy. So as you mentioned, you went through all those different periods, those three market quote unquote crashes or downturns in a short period of time. You started from an option seller and then did you morph into more protection or different sides of the trade how did it morph from like pure premium seller to what you're doing now

we morphed into more protection and even into more buying so we kind of sell and buy depending on what we're trying to capture but just to go to the beginning like in the beginning when i was thinking of just the idea of overpriced options right and trying to capture that you know the very basic strategy was just selling puts right a lot of people do that and one thing we started with was just selling weekly you know seven dte puts at a thing like 15 delta and just sell those puts um and at first i kind of was thinking hey you, as long as your size is small enough, if you don't manage these, you can just sell them. And yes, you don't want to go so much that the market goes down 10% and you blow up. But the idea that if you can sell the

puts, you're going to collect that VRP over the longterm, right? So there's a, there's a terminal positive expectancy, not, not accounting for the path path. Obviously, you can have drawdowns and such. I guess some would argue, sorry, I interrupted you, that the selling of puts is terminal break-even, right? That you could make 100% over 10 years and then lose it all in the 11th year. So you're saying you could model it to say there is some positive expectation. I think at a certain out-of-the-money range, there is a certain amount of terminal. One term I use is called premium capture or PCR. Basically, for every $100 that I sell in premium, how much do I net at the end of the day, net of all the losses in the money stop loss whatever it is so i i tend to think the pcr at at a you know let's call it a 10 to 15 delta range

is going to be a little higher than kind of like at the money if you're just selling straddles i don't think there's going to be that much that you expect to gain or lose buying or selling but as you said 2018 happened drawdowns were large and so we're like look we have to we have to manage risk and we we just use a simple idea of a stop loss i know there's a lot of debate and a lot of controversy over stop losses especially dealing with options and execution all that but i mean we can get into that in a bit but just if we just think about this way if i sell an option my max profit is the credit right and so there's going to be a certain win rate and if you sell 15 delta it's probably like 80 85 for instance but if your losses are too big right even if your terminal win rate is or expectancy

is positive like you can't scale that strategy because you're just gonna have drawdowns that you can't overcome and it's just too risky and so if i do a simple let's just call it stop out at 2x right so if i'm collecting 100 i'm gonna stop out if i'm challenged and the option is selling for three, right? If it's tripled in price and I close it out. So I collected one, I closed it for three by the close. My net loss is two. So I'm using a simple number. I've risked two to make one. And if you use a stop loss, your win rate is going to go down. This is known. And this is another reason why people argue against that. But the idea here is when we model expectancy, you have three variables, your win rate,

which a lot of people focus on, your win size, and your loss size. I think the loss size, the size of your losses is what's overlooked a lot. What I tend to do is focus on the win and loss size and let the win rate be the variable. So if we go back a second,

if we have no stop loss, 15 delta put or whatever delta put, you're going to have a certain win rate. If you cap the losses, risk two to make one, your win rate is going to go down, but you know your risk reward profile so at a risk 2 to make 1

your required win rate to make money is 2 thirds it's just an equation so if you can find a strategy where you can kind of engineer that payoff profile then all that remains

is to see where the chip's all what is that win rate if it's high enough to be plus ev right then just run that over and over again and so it's just become this go ahead yes i think the uh arguments in that would be slippage you lose connection all this kind of stuff of like you can't guarantee that um two to one loss i'd get you could argue over time it's going to be close to it but i think that's what scares people like well the stop loss is imperfect so how do i rely on it so all of those things you mentioned you just got to bake it into your model for instance one of our strategies where you just sell smp puts and it's about a 90 DTE, 15 delta.

Liquidity is pretty reasonable. This is not like selling intraday where you go into money and liquidity is gone and all the gamma and everything. We sell high DTE because the gamma is lower. It's more reasonable. We've looked at it, the slippage on average. Let's even call it sell for sell for a dollar you try to buy for three dollars you buy for 310 or 320 right like 10 20 relative to credit just bake that into your assumptions right that's going to increase your required win rate to break even or for the

same win rate it's going to lower your pcr but at the end of the day it's all in equation and you have to bake and bake those in. And so like people who talk about backtests, like a lot of times backtests aren't reliable because your assumptions about the execution is wrong, right? You're not modeling. And so what we can do is we've taken our live numbers. So we know what the execution, of course, like I said, nothing's guaranteed, but you have enough samples. You can use those to inform your modeling and make it more accurate. Now, with markets being closed, they can gap. That's all baked in, right? There's been instances, for instance, August 5th, right? This one particular particular strategy rather than 2x we gotta add 3x or 4x that's

gonna raise your average loss but once again that just all gets baked in and the more numbers you have and just have to you just have to have correct expectations and assumptions and um and we'll talk about the hedging in a second but that's part of the fundamental premise and a lot of our strategies, we have like a dozen strategies now, but the approach is similar in that the strategies that are using net selling of premium with risk management, we focus a lot on the statistics and the probabilities and use that to kind of model the expectancy. I always tell people overly focused on win rate, like I can build you the perfect 100% win rate model right now, which is buy now, sell when profitable, right? By definition, that'll have 100% win rate. Can you survive it? Can you survive if it's down

98% or something? But by definition, that's 100% win rate. But what does that do for you? So to your point, right? Like just having a great win rate, what does that really mean? Right. You have to have all the other factors. You have to have the average loss, everything else included in that calculus without doing calculus. So one part you said, hey, we got to control control this calculation we can't be losing more than uh whatever 2x 3x you have a number there with stop losses the second was adding some hedging so with longer data options right people kind of don't like that in the sense that hey you know this 90-day option

anything can happen in 90 days right so that sometimes people who want to tend towards leaning towards the shorter duration that might be why but as i mentioned earlier the nice thing about a longer duration is the gamma is inherently lower so that the options move slower or as constant, but you can reasonably hedge them with basically something that's going to react in a market drawdown, right? Like a Vega hedge, basically. Now, there's sort of the classic back ratio, right? If I sell one, I can buy two further out of the money and establish this ratio. Now, if you look at the risk curve, there's sort of this ad expiration,

they call it a value of death, where if the market kind of just lands in that zone in the spread, you're still losing. Yeah, pin risk. Yeah, and you're relying on sort of this quick down move with volatility rising to kind of be a backstop, and that ratio will kind of pop up and kind of curb the drawdown. So that's one way to do it. We do that as well. But what we've really looked at is when we're moving to kind of shorter dated structures, it's very hard to establish a

vega hedge, right? So we have one strategy where we're selling like a daily right just monday sell for tuesday tuesday sell for wednesday just the next expiration right very short-dated strangles we still apply the stop loss by same mechanic but one thing that really kind of scared us about the shorter data ones where we didn't want to lean too much into it was when you're talking about short date options you can't rely on a back ratio or some kind of right you can buy a cheap out of the money wing and just spread it off but at distances you're just establishing a wide credit spread it's not really going to protect you of that like i said the pin risk the market could fall five percent that that wing is not going to

do anything you're just going to take max loss on your spread. And so one thing that we really realized was this idea of kind of flipping the script on what your hedge structure is. So earlier I mentioned you can buy further out of the money options. They're cheap and you have some reliance and low cost, but you also have a reliance on the path dependency right the market has to do a certain thing for your hedge to hedge right yeah or for lack of better words but most people would think well and but same time if it whatever 80 of the time it won't do that thing and i'll i'll be fine right yeah people's brains kind of go like well it'll usually land in this range and i make money and then the one in 10 chance it blows all the way through that i hedge it forgetting that there's right 16 of the time it might be in between those two things so so one thing we we kind of realize is so imagine instead

of these out of them or further out of the money kind of teenies if you will you use a closer to the money like think of a long at the money straddle right if you're long at the money straddle you're actually long the market you're long gamma essentially but it's it's super expensive right so you're gonna think well if i'm selling an out of the money strangle for some credit and i try to hedge it with an at-the-money structure, like, sure, I'm hedged, right? Because I'm actually long the guts now. But doesn't that cost a lot, right? Because you're paying a lot, right?

So it seems counterintuitive. But the interesting thing is like, if you kind of think about, we did the research long-term. If you just buy these at-the-m the money structures they may not cost as much as you realize and what i mean is this right this goes back to the explanation or the discussion earlier about vrp right if out of the money options are overpriced because you know people have this desire for protection and they kind of bid up protection. I think at the money options may be slightly less fairly priced,

meaning the terminal expectancy is not going to be super positive or negative as in you can buy these straddles or buy whatever near the money options. And your equity curve on that structure is going to be crazy, right? When the market moves, you make a lot. When the market doesn't move, you lose a lot. But over time, it actually is kind of wrapped around zero to slightly lower, just depending on which time frame you're looking at. And so if we go back to a way to look into that, that if everyone wants to hedge out of the money, so there's a slight premium there, right? Skew, they put skew. If nobody wants to hedge out the money because it's too expensive, there could be a little discount there. There's less of a carry, you're saying. Highly volatile, but less of a carry as you said guess what this is the hedge less of a carry is actually good right and so if we use these at the money structures you you're you're structurally protecting your

out of the money you know strategy and it's weird because your your income your profit is from those out of the money things you're selling and yes it's very volatile as a package so like combining these two the the return stream is pretty lumpy. So if you're only doing this strategy, this kind of combo, you're going to basically be flat a lot of times. And then finally, when the market rips, that hedge kind of shows some profit. So by itself, it's not great. But what I want to get at was thinking differently about what it means to hedge and what kind of structures you can use, especially when you have kind of an ensemble of strategies. my coin was a zero ev diversifier a sleeve of your portfolio that isn't necessarily meant to drive profits per se but it's just meant to diversify the exposure and so what happened with that is a lot of times in our research and ideation of you know strategy and trying to

generate new ideas it opened up an avenue so things we might've ignored or just discounted before were suddenly opened up. Right. And like all because of positive drift, it's so easy to find a put selling strategy and backtest and it looks great. It's actually very hard to find a bearish strategy or something with call selling because you're always finding the market trend but what i realized was like after some time i don't necessarily have to find a strategy that's quote-unquote bearish that makes money if i can find something that's like kind of flattish or maybe only loses a little bit it might be a good

thing to add to the book just because it's going to be naturally anti-correlated to the rest of the book that's kind of bullish already. And as long as it's not losing a lot of money, it doesn't need to add to my bottom line. It just needs to hedge my exposure and reduce my portfolio variance. Well, right. You're explaining health insurance, home insurance, right? I'm like, yeah, I don't like having to pay this cost but it's going to help my overall bottom line over time and then import overall portfolio construction right we deal with this and trend following and manage futures all the time um i don't this thing's only flat over these three years i don't get it i don't want it my portfolio you're like hey when it when there's an 08 when there's a 22 and it performs you're going to be thankful it's there

if it can carry positive again right if you don't have to pay for that insurance then it shows up that's that's kind of the the whole idea right exactly so it's interesting yeah that you're doing that inside of your own strategy instead of usually that's a portfolio level concept, right? Of adding these pieces. And one thing that's really helped is this idea of it's kind of like first principles thinking. We call it a thinking components, right? You may have strategies and you have all these mechanics. You have a profit take or a stop loss

or you got the hedge. Even a you think about a typical iron butterfly. You think of it as a package. It's like long the guts, short the wings or whatever. But sometimes when you strip down the pieces and think about each

leg of that strategy, each transaction in a set of mechanics. You can kind of distill them down and look at them in isolation and find out what's driving the profits and what is maybe just an unnecessary drag and then you can really strip things down and figure out and and use kind of the best parts and and it's this type of thinking that uh you know lends itself to to realizing different pieces have kind of different purposes and making pnl is not always a priority as ironic as that sounds no, that makes total sense to me. I just don't like it when they call them broken butterflies. That's a sad image in my mind, right?

Those poor broken butterflies. So having said that, how many of these models are in your overall strategy, right? So right now, like just to give an example, in the Zero DTE fund, we have like six or seven different strategies that are all kind of in the Zero DTE space. But just to give an idea of how they differentiate. So again, we go back to this concept of selling premium and having a risk literally on the hour or whatever, right? We would sell amount of premium, sell amount of premium, sell amount of premium, put a stop loss on each different entry.

The reason we did that is like we tranche the entries because interestingly, yes, we're selling SPX. They're all on the same underlying, but with zero DTE, it's such an accelerated timeframe. All those entries, even the the morning the noon and the afternoon entry won't be as correlated as you'd imagine right you can literally track each different entry as a bucket and run a correlation and it's not a hundred you know um and another idea was and that's because even hours apart right yeah or minutes apart literally yeah and so this other idea is because we're using risk management as far as you

know again just a simple stop loss we are kind of laser focused on the risk per unit of credit right so i have this phrase credit as a proxy for risk i know people talk about buying power or margin but if i know that for every dollar i collect i'm only going to risk x then the amount of credit i collect is a proxy for the risk i'm willing to take on a given day and so we've established what we call a credit budget so let's say we only sell a thousand dollars of premium per day that means we technically only put two thousand dollars at risk right just for an example yeah we'll take that thousand dollars and we'll just split it among the different entries so you take the uh thousand dollars and

ten times right hundred dollars each for instance and so we had this very naive strategy and i talked about this on my episode with cory Floating with Models. And back then, I literally emphasized we had no signals. We just sell on schedule. And this was the original one. But we've come a long way since then because we've identified, for one, it's always out of necessity. We noticed that without any signal, the edge from more edge or factor, I know, it was slightly less profitable. It could have been because of the proliferation of zero DT, more volume, more people selling, all these institutions cover call funds. Everyone's selling zero DT. Is that driving down the risk premium? Who knows, right? It's all speculation, but we noticed that it was like

less profitable. So we try to find other ways to express this so we realized like if we can just kind of increase the win rate slightly right when you have this kind of tight expectancy equation win rate when one size lost size even incremental increases to a win rate have meaningful pickups on your expectancy or PC or premium capture rate. So we try to find ways to, Hey, let's not always be neutral as an always sell a point and call. Is there a way to get an idea of the trend? And I was very opposed to this before I was kind of like this. And he technical analysis and looking at all these MacD, RSI, those kind of things.

And I've come to realize, again, I think people call it self-fulfilling prophecies, but there's a reason for that. There is behavioral biases. There's reasons markets trend. So I was more willing to kind of look into it. And so our different strategies are just different ways of hey instead of every on the hour sell puts and calls we're gonna say hey if it's trending upwards or trending downwards we'll lean our exposure right we'll only sell puts which is bullish or only sell calls which which is bearish

and so all of those different strategies are essentially we have different signals informing us of the directionality and where to lean the exposure now they're all trend-based but because and i'll give a couple examples of like how we get the trend signal but because they're different signal sources sometimes the signals align right they all fire everything's bullish or everything's bearish but sometimes you get mixed signals or we get different timings and that's what you want. You don't want all your trend signals just to be one big bucket of correlated strategies again,

right? So we have different strategy sleeves that because the signal is different, one may be bearish and one, which is bullish, right? Which kind of nets out, right? But the timing is different.

So it's essentially trying to just be a little bit smarter about trying to follow the trend. And just an example of one thing to get a trend signal. So because our bread and butter, our expertise is the options, we're very focused on price. So we'll look at the price movement. Everything's related, right? Price of the option or price of the underlying? Price of the option, right? We don't option or price of the underlying? Price of the option, right? We don't do so much of the price of the underlying.

But as I mentioned, everything's related. If the market's moving up, right, the call prices are going to be going up and expanding, right? And the price of puts, which are below the market, are going to be going down or collapsing. And so both of those, fact cause expanding puts contracting both can be an indicator of an uptrend but not necessarily with the same magnitude or timing so looking at cause expanding and puts contracting or vice versa on a downtrend, it's puts expanding. Those can both give you separate signals that are slightly different flavor.

And so that's something we look at the rate of expansion of the calls and the puts. And we look at, you know, if I want to be fancy, I could say we're observing the volatility surface. But no, we don't really graph out the volatility surface. We just pick options at different parts of the chain and kind of observe their movement. And we do

that separately. So those are two separate signals. We do that separately. I was trying to make a point that yes, simply saying yes, calls go up, puts go down, markets going up, but separately looking at them can give you signals of the same direction, but different

timing and different magnitude so that it's interesting that you can observe a lot of things from the chain and just using those to again each strategy so we'll take our kind of credit budget or risk budget if you will and let's say we have six strategies every strategy gets one sixth of the daily credit target or credit you know budget that we get but so that's not balanced in any way? Or you can assume each of the strategies has the same risk? Because it's using the same type of stop and whatnot.

They're not equally balanced in terms of risk per se, but we look at over time the variance because a strategy like we have one, for example, that's a little more concentrated where it it takes longer to fire off but it'll be a bigger size right because it's it's a higher conviction

but of course when you're wrong you get hit harder right and so we look at the variance of that strategy and we'll i guess it's kind of like volatility targeting. We will size the ones that have lower variance a little higher and the ones with higher variance lower because we don't want one to dominate. And I will say one last thing. We have one sleeve that uses the directional, same thing, the signal, but we buy options. And this is the one sleeve that's a long option so we have kind

of a long gamma component and this is the reason you need risk management we've seen these options go thousands of percent right like in this particular strategy look at the equity curve it's like i don't know like a 20 percent win rate and you're just bleeding and bleeding and bleeding until you get a huge hit. And there was a day in April and last December where the market just sells off 100 handles in like an hour and a half and you get massive, like huge profits.

And so you just think, oh yeah, if you're selling options and you're on the other side with no risk management, that's what you're on the other side of. But it's good when you're on the right side of that. And then how do you have do you know what the total Greeks are across the portfolio at each time and are you looking at that of like well if this strategy fires and we go from positive gamma to negative gamma and we

don't want to be that we don't like I could look at my terminal and just like oh here's our Greece but we it's not something we track but what we know is that like you know stop losses are just kind of a way of delta hedging right we're not continuously delta hedging but you you can imagine if i sell so many puts and a bunch of them are marking at 200 loss i'm picking up positive delta right and if i stop those out i've shifted my delta so it's kind of a discrete way of delta hedging without specifically trying to hedge the delta per set. I was going to say that before, even your concept of it, right? It's interesting having not come from the professional space, right? Like your concept of risk per credit, right? That's basically just assigning a delta at each one, right? Like a pro would just be like, oh, my delta is X on this

and that's my risk, which is tied into, into you know how far out of the money and all that zero dte right so a lot of everything you're doing in this one fund is zero dte that was hugely talked about sometime last year i can't remember when it's kind of faded into the background nobody thinks it's going of faded into the background nobody thinks it's going to blow up the whole system anymore but let's just talk for a bit of like when you started getting into that whether it was the retail or in once you were running this professionally um and then what your thoughts are is it is it dangerous is it going to blow up the whole system one day is it totally fine so we'll start

with like how did you first start getting into zero dt yeah so with my original fund i mentioned we started with kind of the 70 puts and we were exploring different parts of the um different tenors so we actually first went up to higher 45 dt and then 90 dt i talked about that but then we started going backwards and we went to the one DTE and ultimately 0 DTE, which is like, you know, it's intraday and it's like the same again, applying the same concepts but just at different tenors and timescales. And

that was late 2019, like September 2019. We sold our first 0 DTE put. We actually didn't even do calls back then. But then we figured, hey, we can apply the same thing, sell calls. We just kind of did both sides. And it's funny because COVID happened shortly after and then those were really scary times.

VIX was so high. And actually, the concept of credit targeting was born then because we used to just do fixed contract size. But then during March of 2020, the credits were humongous. Yeah. It's great. It sounds nice to make a lot of money,

but when it gets stopped out, the losses are just so much bigger. Right. And you were like, you know what? Like this doesn't make sense. We, if we want to kind of lower the variance,

why don't we, and this is actually kind of counter to what most people that do options do because with options you're taught to lean in when volatility is high because that's the opportunity go bigger when volatility is high right we basically do the opposite if my credit per contract is higher and high iv i'm actually going to use that as an opportunity to either go further from the money or lower my size because i'm equalizing the pot of premium i'm collecting per trade yeah so that was kind of born then um but yeah it was it was wild time so we've been doing that since late 2019 and then of course like it was three days a week and then

a big thing in 2022 finally like you know we got the dailies and all the volume going up um and you know even though i you know quote unquote manage money like i've still kind of associated myself with the with the retail crowd i'm still engaged in these kind of online communities and i know a number of people have started like off the shelf retail facing automation right specifically geared towards zero dt trading and and some of these have pretty large user bases now and there's like two or three of them and so i don't know the number specifically on like how much of the flow is like driven by retail versus institutional whatever i just i just see all these

stats that like people keep talking about the volume going up and of course like the the best people to talk about would actually be kind of like the chrysidios or the gym carsons when you've talked to them and a lot of my knowledge is kind of just from them like i'd just be parroting what i've heard but like you know it kind of makes sense about the whole idea of like, there was this idea of the tail wagging the dog and the options complex and, and dealer, you know, market makers hedging kind of driving the fly. I think Jim said like the relationship flipped.

Like he was saying like options are the underlying now. Like he literally said, that's backwards. So again, I'm just parroting, you know, whatever I say, I'm just regurgitating what I've heard from,

from the real experts in that aspect but but it'd be so in terms of your own portfolio though and i think we've already covered this i guess but just the fact that you're using zero dte didn't increase your risk in your opinion right it's not like you're naked and if the market closes down 20 then your whole fund blows out right so i think that's in people's mind that just switching from even 30 DTE and I'm going to start, do you ever listen to a Smart List podcast

and they talk about his sister Tracy in Wisconsin. So I'm going to start talking about my friend George who listens to the podcast. So DTE is days to expiration for George. But so switching from 30 dte to zero dt didn't or let's ask the question did that increase your risk so the reason zero dte was kind of of interest and how it got you know literally we spun it out to its own fun right we made a fun out of it was because of the lack of overnight exposure now there's always trade-offs so even going from one dte where you take one gap now to no gap we're essentially day trading if you will the options

so you lack that gap risk but what you take on is the gamma risk right because you're inherently going to be selling much closer to the money that's just by definition if you want to collect a reasonable amount of premium and so there's that and you know we understand and i mentioned you can't really properly hedge zero dte because you just you know you can't do a vega hedge the market moves you're already right there so there's two kind of things one everything's spread off we don't trade them naked so they're spread off so there's like a fixed amount that you can lose per spread right just per unit of risk um and on top of that like we just you know i've i know there's people who kind of use 80 90 of their account right because when you're doing spreads right even if that portfolio margin,

it's basically just a spread amount. Like you don't save any margin. It's just whatever that amount is times the contracts that you risk, right? So we're not going to ultimately size is the backstop, right? And you're going to size it to an amount where you can, you're not going to blow up, right?

You might lose a you know a couple months of profit but yeah who hasn't done that before right but again size is the ultimate backstop so like we look at it like yes you have stop losses but that's your kind of primary line of defense if you will but in the case you can't rely on that um and and i see my um i talked with i know i think you know chris um aptamacia like he refers to it as emp risk right like exchange goes down or you can't and so at the end of the day the size is going to be the ultimate definer of right but that would have been the same thing with 30 dt right like right? Like you're still doing the same calculations. It's a little bit different

because with 30 DTE, one, you can be further out of the money, but you can kind of structurally... Okay, you know, we talked about with the 90 DTE and the back ratios. Yes, those hedges depend on a large event and a large shock to hedge but if that event does happen you should be well hedged right so you can conceivably come up with a structure that will

react in a black swan event what i was saying was with zero dte you really there's no market down there yeah yeah you can't structure something there's no vega so that's the exposure is just going to be that gamma it's just full on so is there a market down there if i wanted to buy a 30 out of the money zero dte put so the problem is anyone selling them maybe there is but here's the thing let's say i'm selling a put that's one percent out of the money right and i buy a put 30 out of the money the mark since there's no time left a market has to drop 30 before you so that's the difference with a with the with the back ratio right you might be selling 10 out of the money and buying

20 out of the money but you have 90 days left so if the market even drops 10 vix goes to 80 you're going to get a pickup from that ratio on the back that's, but you have 90 days left. So if the market even drops 10%, VIX goes to 80, you're going to get a pickup from that ratio on the back. That's the difference. You have that Vega component. You don't have that with zero DTE. And what's the average like deltas you're trading? Are they like 80, 90? Like they're essentially, as you said, you're day trading basically. You're almost day trading the futures, right? Yes, but we're still primarily selling. We're not intentionally selling in the money or trying to get that full Delta 1 exposure. So depending on the time of day,

we're probably going to be anywhere from 10 Delta, 8 Delta in the morning to late day, maybe 20 or even 30 Delta. But we still try to get that. So even in the morning, 1% out is only 10 Delta? It depends on VIX and a lot of things um yeah so something like that yeah it really depends depends on vix depends on um which it which exact kind of price per contract you're trying to collect like right now what it's two o'clock pm

uh eastern time here i'm just taking a quick look like a 30 delta put now what is this uh like a 15 delta put yeah this is 57 85 this is like 20 points out of the money right that's 5800 so it's it's tiny um okay yeah yeah and then do you do in real time do you feel that like binariness for lack of a better term? Right. It's like has almost no delta. And then all of a sudden it just flips to having tons. Of course. Of course. Yeah. So like gamma. But yeah. So we have considerations for that. Like we know strategies that trade earlier. You can be further out of the money. You know, you kind of know if you're like 30 points away and it's by the end of the day like you're relatively safe but like later in the

day you're you have to be trading very close and so we're aware that statistically speaking you're just going to end up in the money more frequently and so um one thing i mentioned like you talk about scaling strategies. We won't lean as heavily into the strategies that trade late day, even though they look very profitable because theta is enormous. As long as the market doesn't move, you're going to make all that money in five minutes, right? But if it does move, you lose a lot real quick. So it looks very attractive, but we know inherently there's that in the money risk, there's liquidity risk. So we won't size that sleeve as big as we otherwise might have if you look solely at the performance.

Yeah. And to me, it's almost like flipping a coin at that point, right? It is. Like a few minutes left. Remember, if you have a coin that's 50%, you make $1.10, 50%, you lose $1. You want to flip that coin as many times as you can. It's still a good coin, you know? Which leads to me, like, do you think the exchange will, what are you trading, SPX options?

Yeah, we just trade SPX index options. Got it. Do you think they'll eventually go to hourly and minutely? And, right, they're for-profit exchanges. I think they're just going to keep cutting it as fine as they can until people start buying it. I've heard the rumors. Honestly, I don't know how I feel about it,

but we're doing automated stuff. We're already trading. We do a couple hundred trades a day. So maybe just instead of trading the one that expires at 4, we should expire it at 9, 10, 11. Who knows? Let the computers hash that all out.

So where do you go from here? What's next on the, on the horizon? More research or let these strategies roll for a while. There's always more research. Like we, we bring a strategy online like every three, four months, I guess. So there's always, there's like so much to explore. And last time when I was with Corey, he asked, for instance, like, will we explore other markets? It's kind of like the limitation for us is just the data. Like, cause we, we always very thoroughly like test everything and validate

everything and even in spx like we continue to find different ways of exploring the strategies and a lot of it's just anecdotal like hey today the market did this oh man that sucked i wonder what if we did that instead and as a. And of course, like, you know, you want to avoid curve fading and cherry picking and just, you never want to develop a strategy that's fixing a specific problem, but you can get a lot of ideas from the problem that you see.

And so you just kind of see what sticks and like there's all these different ideas that we keep trying. Do you ever worry that you're, sorry, do you ever worry your edge is your naivety almost right not to offend you sorry but right if that's your edge and you didn't know all these other things and then as you learn them you incorporate them in the model and then you become just like everybody else so this goes back to what we were talking about earlier where uh the factor or the

edge like you have to have a fundamental belief that that factor exists that vrp is a thing that trend you know trends and momentum based on behavior biases is a thing because if you don't have that that that is the first principle everything is just a iteration or build off of that right and so i think as long as I have reason to believe those factors exist, and I think they will exist, you know, like there's a phrase from Jim O'Shaughnessy from Infinite Loops. He says like human behavioral bias or something. It's like the last exploitable edge. I probably killed the quote, but yeah. And so I think there's a lot of meaning in that. So as long as humans don't change and they're biased, they're going to have kind of predictable behaviors

which lead to all of those other things. But that's funny because we're in the midst of AI, which is designed to kill those biases and take them away, right? Or maybe it's just enhancing them. Maybe we're coding the biases into AI. Right, right. People say someone has to code them, right? So maybe it's just enhancing and maybe we're coding the biases into right right people say someone has to code them right so like maybe just it's just an extension of that you're

they've learned from the entire human history which is just codified the biases right and do you use any ai in the research or the trading or anything at the moment no like we have a couple guys who have some ai background and we've looked at trying to look at different features and see if there's patterns. But I don't know. Like we haven't found anything, nothing actionable yet. Yeah. Not that we're opposed to it. And it's weird, right?

But yet spurious correlations are like, oh, always sell it 945 a.m. on Tuesdays. Yeah. Okay. Why? Yeah. Just because the AI said so. I want to know the reason. Exactly.

Great. What else? Got anything. I want to know the reason. Exactly. Great, what else? You got anything else you want to leave us with? I think the idea of kind of retail. I know there was, especially a couple years ago when I had that appearance with Corey, like there's this idea, it's hard to disentangle the retail space in terms of the people who are just bull market geniuses. I mean, I see all these accounts of like trading the wheel or like,

you know, selling puts. And I think that's kind of my indicator of like, we're at the top. Right. But, but there's, but there's that part of the space.

But there really is. And they started it like right after COVID. Like, this is easy. Yeah. Something like that. Right. And then there is. But there is another side of kind of the retail aspect.

Retail, maybe they're not managing funds or part of large shops. But like, there's smart people out there. And it's it's something where like uh don't discount the little guy you know right um well it's almost a large law of large numbers right like if all of them are putting their minds to work there's going to be some good stuff that comes out of there yeah and part of that's because there's been this proliferation of uh data that's available not just to the big shop like you can just go to sebo shop and buy data and like you know if you can code and you can process data it's all about

big data right and uh and there's off-the-shelf sophisticated back testing software automation software uh so yeah it's just uh it's been interesting to be a part of that side of it and watch that space grow and again like that's kind of the side that i i still kind of associate myself with even though i've quote-unquote joined the dark side if you will like kind of imagine money don't do it right until you have like a compliance team and biometric scans to enter your office and stuff you haven't gone full dark side so yeah you'll be good um all right well thanks so much david i think we'll leave it there um tell everyone where they can find you where they listen to the podcast yeah um so my podcast is called the the trade busters um you can should be to find on most of the major platforms apple spotify google podcast

and it's a it's kind of a collective mix it's retail oriented options focused um but it's it has a mix of strategies specific education on that um i've had a lot of guests in this space i've really tried to broaden the horizon of like what it means to be a retail investor so i've had people like cory andrew beer um jerry parker and to kind of talk about different products and now you can you can construct capital efficient institutional quality type of portfolios with the products available and portfolio margin and just like it's so accessible now so that's kind of been my big drive and then kind of why i do what i do um and i have a if you go to the tradebusters.com um that's kind of my quote-unquote trading page if you will it's actually just a google sheets deposit there's like this running joke that i've never made into a real website but there's links to my podcast

episodes um other podcasts probably a number of um your episodes that i really like it's sort of just like a repository of like stuff i like to share it's kind of like uh chris's uh the moon tower but kind of my version yeah i love it i gotta get chris on here eventually maybe in the new year um sure well yeah check that out and then so you started that when, the podcast? Wow, I started that like summer of 22, maybe? And it's like 130 episodes now. It's crazy. I can't even believe how much there is, but it just kind of goes.

Right. You like doing it. You like the talking, the scheduling, all that junk is a pain in the butt. But the talking is the enjoyable part, at least to me. Well, it's because I don't like to write. I actually linked, there's a handful of essays I wrote that were pre the podcast. And just whenever I had something, I wanted to share certain ideas. But I found it would take me a month to write. That's not my MO. Jump on the AI. that's tailor-made for you there right just open a memo recorder and talk for go on a walk talk

for an hour and then have ai write a well a summary on it well that hop on record and talk that's basically how the podcast was born so i don't like to write so i just talk and then so i can just sit there and talk for an hour easily and then just you know so it's just kind of like miscellaneous thoughts and that's how that started love it all right um well check out david check out the podcast check out you got a website for the gp uh i not at the moment feel free if someone's interested just just reach out um you can find my contact info, the Google Sheets page, my TradeBusters email is there. So feel free to reach out, but let's leave it at that. We'll leave it at that.

All right, David. Thanks so much. All right. Thanks for having me. It was a pleasure. Yep. Love it. Okay.

That's it for the pod. Thanks to David. Thanks to RCM.cm thanks jeff burger for producing and rcm for sponsoring we'll see you next week with jason buck and zed francis to close out the year uh usually we take off thanksgiving to after january so last part of the year next week tune in peace you've been listening to the derivative links from this episode will be in the episode description of this channel follow us on twitter at rcm alts and visit our website to read our blog or subscribe to our newsletter at rcm alts.com if you liked our show introduce a friend and show them how to subscribe and be sure to leave comments we'd love to hear from you

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