The Glory Days, Market Making & Trading Options at the CBOE with Noel Smith of Convex AM

This week, we’re painting the picture of what life on Chicago’s option trading floors was like at the CBOE…but there’s a catch — we put it all on the table and needed two episodes! Today’s guest came into asset management in a round-about way – trading his own money for decades before venturing into the world of other people’s money…We’re talking to the one and only Noel Smith @NoelConvex , Managing Partner and Chief Investment Officer of Convex Asset Management.

In this two-parter, we’re talking everything from the Pets.com and the Sears option pits to singing Janis Joplin’s Mercedes song to a down and out trader, to steak dinners at Gibson’s and a yacht on Lake Michigan. Along the way, Noel managed to fund the founding of electronic market maker Getco and create a prop firm spanning dozens of pits with 50 traders under him. How does market making in options really work, is gamma-driven delta hedging in option flow as important as FinTwit makes it out to be, and where did the floor trading edge go? It’s all here.

Chapters:

00:00-01:53 = Intro

01:54-09:05 = Lake Tahoe, Taxes & Thrill Seeking Sports

09:06-28:41 = In the old days, the computer was your brain

28:42-38:24 = Prop trading firms & the rise into High frequency trading

38:25-48-05 = Third Millennium, and Edge in the Quality of Information

48:06-58:14 = How GETCO came to be… Nearly Blowing Out

Follow along with Noel Smith on Twitter @NoelConvex and for more information on Convex visit their website: https://www.convexam.com/

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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