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Well, was I flat or not and why did I have that position?

(a) Everything should be made as simple as possible, but not simpler." (c) not me. (b) Conceptual complexity is not the same thing as operational complexity. E.g. you could have a fairly complex enough idea about the dynamics of implied volatility or the shape of the terminal distribution...

Right now, I am getting paid the aforementioned "serious bucks" to trade volatility products on behalf of a fund. Guess what, I do have losing days and losing weeks. My employers are grown-ups and understand the nature of the business. In my career on both sell-side and buy-side, I've had...

I am not sure what exactly you trade, but this sounds a bit delusional. Everyone has losing days, weeks, months and sometimes even years. In fact, a trader that shows a P&L profile that is too smooth (adjusted for the asset class and trading model) should make you suspicious - either he is...

In general, market-makers use business day volatility, so the option price would be down by Friday afternoon. If anything, weekend volatility is probably too cheap given the news flow.

All of that would be nice, but in real life i found that there is virtually no difference between trading at a fund and trading on a prop desk, at least in my product space (I have done/doing both). The only advantage of working for a bank was stability of capital vs allocation/redemption cycle...

Maybe we are coming from difference perspectives (my background is BD and IB prop desks)? My expererience shows that usually IP is pretty much worthless without the provider of the "I". Once someone is gone, the strategies that he used to run are either dropped right away or slowly decays...

Actually, most people in the industry know what RenTech is doing, plenty of people came and gone. I will note that there is a big difference between "public" and "published" - plenty of stuff out there is public but have not been published. Everyone is doing more or less the same thing - the...

Yes, that's the positives - the negatives are obviously free rider problem, risk control and smart split. Even with a single partner who is my close friend, i am struggling with various forms of these problems. If you could structure it such as to resolve these issues, this is a dream come true...

5-6 at different stages. Usually, you need to REALLY understand the structure to be able to predict how it is going to effect the vol, considering the floating strike nature, early ex clauses and possible caps. Yes, granted vol is more frequently mis-priced, for a variety of reasons...

For the managers, an ideal situation, of course, would be a coop of strategy managers. This would give each manager the benefit of diversification and the economy of scale. I doubt, however, if it can be done properly and efficiently for variety of reasons (free-rider problem, risk supervision...

Yup. Edge and alpha are two different things. To be fair, some guys do have alpha, but so commingled with the edge that it's hard to tell where one starts and the other ends (e.g. guys who do OMM partly survive on internalising the BD flow).

A situation where vol is up but the market is flattish will hurt you a lot and we have seen plenty of these in the past few years. Also, if you are trading them in a fairly long dated form, you can get hurt by a reset in volatility anchor. E.g. day 1 you are long a -7% put and short a 20/25...

Obviously, it depends on the deal and the size of the portfolio but I would say that total comps over 10mm is fairly rare, you'd have to have a really good year and others in the fund would have to have an ok year too. Think of it this way - "difficulty and expense adjusted", running a small...

Usually, there is no relation to the actual fees - that goes to the partners. The formulas I've seen where anywhere from 8% to 15% of total revenue, but you'd get charged for the cost of capital. E.g. if a PM made 10mm on a 50mm book, the formula is 10% and cost of capital 1%, the total comp...

Most large funds are multi-strategy in one way or another - sometimes they would have multiple PMs and sometimes they would have multiple traders (the distinction is mainly in the compensation model). Capacity varies - sometimes, the expectation is that a PM would make 10 million and some times...

He's running a multi-strategy fund now, so the performance is not really about his own trading style, but more about his "taste" in managers.

No, rates options initially, now equity vol. I don't know. You going to have to ask Paulson and a few other funds that pretty much built it as a part of their business model. I mean what I mean - individual level data is more or less crap. Unless you are dealing with a higher frequency...

I think what's impressive is her salesmanship, not trading. She was able to retain AUM through every large market event, even though other funds (even the ones that made money) suffered redemptions. First of all, I really doubt she makes 200% annualized returns. A simple approximation - 5...

There is no question that short-dated OTM putties are on the rich side and there is some statistical value in selling them. Somebody here has offered a proper analogy - as a seller, you are a provider of insurance. Unfortunately, you are providing insurance for a systemic event with very little...