A 20-Year Veteran Reveals the World of Options Market Making

Pog champ

great infos

Nice listening to this while paper testing my option algo

Great videos! can't wait for what you have next!

Can you put the book list in the description?

I wish you could have asked them what the net P/L % these firms make per year on their books.

Good one!

Amazing

50' minutes where are the chaptersss :)

awesome intro, one reccomendation for viewer retention, create a slide of stockphoto/vids to splice together instead of the call transcript. I knew after second 1 that i was watching this from start to end, but for others this might help retain attention and thus viewership.

please more interviews!

Hey, guys. Can you explain what is the difference between buy-side and sell-side quants?

Really good interview. Thanks for posting. Im an individual algo trader running algos trading stocks, futures and options. I do my own backtest, strategy development, coding and trade post mortem and its a very time consuming process but love it.

really apricate the insight but it pretty clear he is a failed MM trader . and got outpace by better and new traders over time hence why he left and then came back

amazing video

Quality content here

Please make more videos 👍

Wasn't this the same tactics explained in an AMM documentation published by Barclays a few years back? It even went as far like a public admission to manipulation by outlining how well it worked due to the surge of inexperienced traders entering the market with the popularisation of RobinHood

I am not sure why we accept that these guys should blurt out as much jargon as they can as quickly as they can, but anyways I don’t like it.

Well done! Next time maybe you could ask about 0dte index options and their affects (if any) on the overall market/movements and other elements of the markets that may be affected such as $ViX etc. Great mirroring btw, keep up the great work 🙏

The math is not that hard really. The most important lesson is to learn the logic behind it. Then develop a math equation that you will be able to understand and use it as your compass to define your risk or your edge. Instead of backtesting a strategy why don't you develop an abitrage equation (ability to calculate all possible outcome) to determine its potential risks look for outcome that the market haven't discount it yet.

Can i have the name of the recommended book please?

10min in and wow what a great interview if you are trading options discretionarily you have to know how guys like this think they are your opponent. you heard him taking directional bets against him isn’t gonna win in the long run. you can both win if you trade volatility because majority of retail will trade directional who knows how long this will last take advantage while you can

Nassim taleb is the best

This is called in a simpler way: "Legal Theft" "Legal .....Lawfull Theft". The world will start to develop and move forward and grow economically when all Financial markets are closed and so does currency exchanges. And when there is only one currency in the world.

Sad to hear that making one-sided markets are frowned upon. I MM both sides, but I quote higher asks, maybe a standard deviation or two higher due to drift. I'm really just a hobbyist quant with a software engineering background, so it's a new world. A new world where math is actually necessary unlike the folks who say math isn't necessary in programming, until it is lol.

Just do option spread trades, its the only safe way to trade

True. There are so many algos to cover the trades, even there are many model allowing you to do market making to cover horizontal and vertical spread with zero risk to exposed funds with minimum capital investment to run.

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Did he say $300K out of college ? blimey.

This is all very fluffy info. Nothing here that will make you money. Also Shelly Natenberg is not a trader. He only discusses theory. If you want to experience real pain go buy some upside calls and sell futures delta neutral against them during a trend day up. You’ll be given no chance to scalp. And by the end of the day you will have lost on your calls and lost big on your futures. While the market maker, who had zero idea where the underlying was going, wins and wins. I’m not saying it isn’t possible to make a lot of money. It is. You have to become an expert is managing risk. This is your edge.

Awesome conversation man, thanks for the discussion

This is really, really good. Thanks!

Natenberg - Options Pricing & Volatility
John C Hull on Options
Above two mentioned in the video, I would personally also recommend
Options Market Making by Alan Baird --> A little old and outdated but still worth a read by everyone