Goldman in Jan

LP’s aren’t stupid. If they see you blew up a fund taking stupid risks then shut it down and restarted to avoid high water marks, you think they’re going to put a bunch of money with you again? Meanwhile, reports are pouring in of funds cutting fees just to keep people from redeeming. While no one’s going to shed a tear, this industry has been seriously harmed, and it’s not going to just bounce back in a year or two. My boss was looking at his mail the other day and he said to me “Do you think Alpha magazine will exist in one year?” I said as long as nothing happens to trader monthly I’m fine.

JoeyDVivre Wrote: ------------------------------------------------------- > You couldn’t have much of a position in the > industry. > > a) The top 200 hedge funds control about 80% of > the assets in hedge fund land and those are the > ones with the “huge reputations”. The 2% number > is wacky. > > b) I’ve been the risk manager of about 2% of the > assets in hedge fund land and nobody even > suggested such a thing when we were down (which > didn’t happen much). You delever when you are > down. > > c) They have absolutely tons to lose and they lose > it quick. If being a trader and working for a pioneer in the options industry isn’t much of a position, then okay.

“Do you think Alpha magazine will exist in one year?” Yes, sir. We have recently been asked if we would like to be featured in the first issue of the revamped magazine called “Negative Alpha”.

IronMan Wrote: ------------------------------------------------------- > JoeyDVivre Wrote: > -------------------------------------------------- > ----- > > You couldn’t have much of a position in the > > industry. > > > > a) The top 200 hedge funds control about 80% of > > the assets in hedge fund land and those are the > > ones with the “huge reputations”. The 2% > number > > is wacky. > > > > b) I’ve been the risk manager of about 2% of > the > > assets in hedge fund land and nobody even > > suggested such a thing when we were down (which > > didn’t happen much). You delever when you are > > down. > > > > c) They have absolutely tons to lose and they > lose > > it quick. > > If being a trader and working for a pioneer in the > options industry isn’t much of a position, then > okay. Execution desk at a start-up. Yep.

JoeyDVivre Wrote: ------------------------------------------------------- > IronMan Wrote: > -------------------------------------------------- > ----- > > JoeyDVivre Wrote: > > > -------------------------------------------------- > > > ----- > > > You couldn’t have much of a position in the > > > industry. > > > > > > a) The top 200 hedge funds control about 80% > of > > > the assets in hedge fund land and those are > the > > > ones with the “huge reputations”. The 2% > > number > > > is wacky. > > > > > > b) I’ve been the risk manager of about 2% of > > the > > > assets in hedge fund land and nobody even > > > suggested such a thing when we were down > (which > > > didn’t happen much). You delever when you > are > > > down. > > > > > > c) They have absolutely tons to lose and they > > lose > > > it quick. > > > > If being a trader and working for a pioneer in > the > > options industry isn’t much of a position, then > > okay. > > Execution desk at a start-up. Yep. execution desk?? LOL!

100% with Joey on this one. I work at a hedge fund (where we have fortunately scraped through the year in positive territory) and the way any decent sized hedge fund is structured simply doesnt allow for sudden wild increases in risk taking. There are pre specified Var limits, drawdown limits etc, and these are determined by the risk managers who do not have the direct financial incentive to try and make back losses that the traders have. Much of hedge fund money comes from fund of funds, and any hint of significant style drift would have them running for the door. You dont blow up your AUM and with it your management fee in an inpatient attempt to get back to your watermark

After the naked put selling ‘thanks chumps’ fiasco, I can totally believe that you see people taking crazy outsized risks (although if your options pioneer boss approved that trade then I shudder for your fund) but its totally unrepresentative of the industry as a whole

chicagofx Wrote: ------------------------------------------------------- > 100% with Joey on this one. I work at a hedge fund > (where we have fortunately scraped through the > year in positive territory) and the way any decent > sized hedge fund is structured simply doesnt allow > for sudden wild increases in risk taking. There > are pre specified Var limits, drawdown limits etc, > and these are determined by the risk managers who > do not have the direct financial incentive to try > and make back losses that the traders have. Much > of hedge fund money comes from fund of funds, and > any hint of significant style drift would have > them running for the door. You dont blow up your > AUM and with it your management fee in an > inpatient attempt to get back to your watermark No offense but if the PM/CEO tells the risk manager to do something, he does it. And there aren’t any questions asked. I use to work at Ritchie Capital, and nobody, not even 2nd in command, questioned the CEO. And look how that turned out.

It doesn’t work that way at all. If the Man ever came to me and said “look, we’re down a lot so we need to get back to the highwater mark so we need to incease our leverage” (which I could do in 5 seconds across the board), I would start out with the usual reasons why that was a bad idea. If he insisted, I would say “OK, let’s run that past legal” (he would never say no to such a request which is how he got to be the Man). Legal would tell him that was a very dangerous course of action. If he then insisted and it wasn’t crazy, I would document my objection, and then go back and do it. But he would be jeopardizing his firm over the advice of risk and legal and people who are successful in life just don’t do things like that if they have hired the right people for risk and legal.

IronMan Wrote: ------------------------------------------------------- > chicagofx Wrote: > -------------------------------------------------- > ----- > > 100% with Joey on this one. I work at a hedge > fund > > (where we have fortunately scraped through the > > year in positive territory) and the way any > decent > > sized hedge fund is structured simply doesnt > allow > > for sudden wild increases in risk taking. There > > are pre specified Var limits, drawdown limits > etc, > > and these are determined by the risk managers > who > > do not have the direct financial incentive to > try > > and make back losses that the traders have. > Much > > of hedge fund money comes from fund of funds, > and > > any hint of significant style drift would have > > them running for the door. You dont blow up > your > > AUM and with it your management fee in an > > inpatient attempt to get back to your watermark > > > No offense but if the PM/CEO tells the risk > manager to do something, he does it. And there > aren’t any questions asked. I use to work at > Ritchie Capital, and nobody, not even 2nd in > command, questioned the CEO. And look how that > turned out. BTW - thisis exactly the point. There will always be lunatics like Ritchie around but most hedge funds have checks and balances instead of just listening to one egomaniac.

JoeyDVivre Wrote: ------------------------------------------------------- > IronMan Wrote: > -------------------------------------------------- > ----- > > chicagofx Wrote: > > > -------------------------------------------------- > > > ----- > > > 100% with Joey on this one. I work at a hedge > > fund > > > (where we have fortunately scraped through > the > > > year in positive territory) and the way any > > decent > > > sized hedge fund is structured simply doesnt > > allow > > > for sudden wild increases in risk taking. > There > > > are pre specified Var limits, drawdown limits > > etc, > > > and these are determined by the risk managers > > who > > > do not have the direct financial incentive to > > try > > > and make back losses that the traders have. > > Much > > > of hedge fund money comes from fund of funds, > > and > > > any hint of significant style drift would > have > > > them running for the door. You dont blow up > > your > > > AUM and with it your management fee in an > > > inpatient attempt to get back to your > watermark > > > > > > No offense but if the PM/CEO tells the risk > > manager to do something, he does it. And there > > aren’t any questions asked. I use to work at > > Ritchie Capital, and nobody, not even 2nd in > > command, questioned the CEO. And look how that > > turned out. > > > BTW - thisis exactly the point. There will always > be lunatics like Ritchie around but most hedge > funds have checks and balances instead of just > listening to one egomaniac. Joey, before Ritchie went under, it was considered one of the best in the business, and Ritchie was a well respected trader. Things can change in the blink of an eye in the HF business!

It wasn’t one of the best in the business regardless of how it was considered (or maybe it was and Ritchie just became a lunatic, which happens).

Haha Ironman you get the best threads started - I love it . . .

IronMan Wrote: ------------------------------------------------------- > If being a trader and working for a pioneer in the > options industry isn’t much of a position, then > okay. I never type stupid stuff like this on the internet, but ROTFLMFAO! This is better than Lion2004! You barely understood what was happening when you shorted a single put! Trade settlement isn’t “trading” kiddo. You post way too much on here for me to believe you’re any sort of trader, not to mention the frequently silly things you post.

NakedPuts Wrote: ------------------------------------------------------- > IronMan Wrote: > -------------------------------------------------- > ----- > I never type stupid stuff like this on the > internet, but ROTFLMFAO! This is better than > Lion2004! £100 million before I’m 35!

what happened to Lion?

NakedPuts Wrote: ------------------------------------------------------- > IronMan Wrote: > -------------------------------------------------- > ----- > > If being a trader and working for a pioneer in > the > > options industry isn’t much of a position, then > > okay. > > I never type stupid stuff like this on the > internet, but ROTFLMFAO! This is better than > Lion2004! You barely understood what was > happening when you shorted a single put! Trade > settlement isn’t “trading” kiddo. You post way > too much on here for me to believe you’re any sort > of trader, not to mention the frequently silly > things you post. Listen up son, trading naked puts in a regular brokerage account with 10,000 capital is much different than trading vol at a hedge fund. If I need to elaborate on that, then clearly you are the one in trade settlement.

What kind of fund do you work at that allows you to trade options in your pa while also trading them on the desk? Anyway, as for being different…In college I was skiing with this guy who I had skied with a bunch of times and we had a big powder day (at least by Vermont standards) and I was falling all over the place. I told him that I was much better on hard pack than this crappy powder stuff because [blah, blah, BS]. He told me that I would be better on both if I realized that they were the same and gave me some really helpful lessons.

IronMan Wrote: ------------------------------------------------------- > NakedPuts Wrote: > -------------------------------------------------- > ----- > > IronMan Wrote: > > > -------------------------------------------------- > > > ----- > > > If being a trader and working for a pioneer > in > > the > > > options industry isn’t much of a position, > then > > > okay. > > > > I never type stupid stuff like this on the > > internet, but ROTFLMFAO! This is better than > > Lion2004! You barely understood what was > > happening when you shorted a single put! Trade > > settlement isn’t “trading” kiddo. You post way > > too much on here for me to believe you’re any > sort > > of trader, not to mention the frequently silly > > things you post. > > Listen up son, trading naked puts in a regular > brokerage account with 10,000 capital is much > different than trading vol at a hedge fund. If I > need to elaborate on that, then clearly you are > the one in trade settlement. This is basically my post, only rewritten and put back at me. First, you insinuate the other person has no idea what they are talking about. Then, you demean them with some “junior” put down. Finally, you imply they work in trade settlement. At least come up with something original.

JoeyDVivre Wrote: ------------------------------------------------------- > What kind of fund do you work at that allows you > to trade options in your pa while also trading > them on the desk? > > Anyway, as for being different…In college I was > skiing with this guy who I had skied with a bunch > of times and we had a big powder day (at least by > Vermont standards) and I was falling all over the > place. I told him that I was much better on hard > pack than this crappy powder stuff because . He > told me that I would be better on both if I > realized that they were the same and gave me some > really helpful lessons. It’s a small one, but I’ve worked at 3 different firms since college, and none have prohibited option trades in a PA. Yes there are similarities. However, someone coming on this board and claiming I’m not a trader because I didn’t realize the margin impact in a small personal account is pretty bogus as they are different animals. I sling 500 lots at work, and at home, doing 2 or 3 is pretty risky.