Giving Thanks

"A grateful mind is a great mind which eventually attracts to itself great things."
- Plato

I am where I am today because I’ve been wildly fortunate. My life has been blessed by happenstance and selfless acts on the part of so many people in my orbit. Thanksgiving serves as a reminder to express that profound gratitude. What a wonderful holiday.

Statistically Speaking

We operate in a field dominated by probability. The short days and long nights of late November give me an opportunity to marvel at the improbability of it all.

I’m transported back to 1994. I’m in my orange 1973 VW Beetle convertible, driving from Medinah Country Club, where I was a caddy. Dave Matthews Band’s recent EP blasting from my tape deck. Dancing Nancies begins, and everything seems possible…

He stands, touch his hair, his shoes untied
Tongue gaping stare
Could I have been a magnet for money?
Could I have been anyone other than me?

At that point, I had no interest in being anyone other than me. I was doing well in high school. A couple of months later, I would be awarded a full college scholarship, and everything seemed possible.

My next mental pit stop was in 2007. I was approaching 23 30 years of age, and it felt like the walls were closing in around me. The money I had made had been squandered.

Twenty-three and so tired of life
Such a shame to throw it all away
The images grow darker still
Could I have been anyone other than me?

At that point, I wanted to be anyone other than me. I was spinning my tires professionally and had been backsliding personally for years. It felt like I was part of a high-stakes version of Press Your Luck and Plinko. The odds were long and getting longer.

Thank you to my family and friends who loved and supported me throughout. You helped me see that I still had optionality.

Some Backstory

Managing derivatives market risk is difficult, humbling, and can be very rewarding. It will challenge your psyche. Early in my career, I didn’t manage the ups and downs associated with a career in the markets well. My P&L influenced how I felt about myself, and it was a recipe for unhappiness.

As a market maker, your job is to manage an allocation of capital. Specifically, to protect and grow that capital. Your job is to make money. “Success” is simply doing your job. Unprofitable periods felt like a cataclysmic failure that would never end.

Making money as a market maker became increasingly difficult in the early aughts. The cost of doing business skyrocketed. For example, I leased a seat on derivatives exchanges, and my monthly seat expense went from ~$1,600 in late 2000 to ~$16,000/month in late 2006. All the ancillary costs increased in tandem. Technology fees, other exchange fees, and my commissions increased significantly. By early 2007, I needed to make about $35k a month just to break even.

I was approaching the age of 30 and didn’t feel like I had a “transferrable skill set.” My outlook was bleak, and my personal choices reflected that resignation. I lost sight of the basics of optionality. I forgot how dynamic markets tend to splinter and grow. I didn’t realize that I had developed a fluency in the language and mechanics of the options market… and that alone was valuable. It gave me options.

Over the same period, these once provincial and niche markets grew. The exchanges that were, for many years, member-owned entities were becoming publicly traded, for-profit businesses. Shareholders expected future growth, which required a broader understanding of the benefits and risks associated with optionality.

As it turns out, I was in the habit of writing about where and why I saw opportunity in the options markets. It served as a forcing function for me to stay on top of markets and sharpen my ability to express a given view. Originally, it was just for me and a couple of friends, but blogging was a cottage industry, and I started “publishing” my work for a slightly broader audience.

As fate would have it, an intrepid human resources leader at one of the exchanges happened across something I wrote. She called and told me about an education role within the exchange. I started that position nine years ago and I’m profoundly grateful for where it has taken me.

My gratitude extends far and wide.

As Thanksgiving approaches, I feel compelled to extend my requital to so many who have helped me along the way. This list is in no way comprehensive, but it’s a start.

Thank You

I’m grateful for my parents, who instilled a love of language and the value of a work ethic. They sacrificed so that my sister and I could flourish. They gave us roots and wings.

Thank you to Peter Hermes, the members of Medinah Country Club, and every donor to the Western Golf Associations Par Club.  On December 13, 1994, I was awarded an Evans Scholarship. Outside of the birth of my son, I look back on that date as the most consequential in my fortunate life. A tuition-free education opened countless doors.

Thank you to Lee Tenzer, who founded LETCO Trading. As John Lothian said: “Tenzer is one of the giants of the Chicago markets.” Special thanks to Chuck Palm (HUC), a LETCO independent who took a shot on a kid who needed a job.

I’ll never forget walking onto the trading floor in 1999. It was the most beautiful cacophony of chaos, and I couldn’t wait to learn more. Tenzer and Palm offered entre in this business. Twenty-five years later, I’m still here.

Thank you to Dan Koutris (KOU) and Joe Fahrenbach (FXR) for showing me the “upstairs” side of the business. Thank you to Bill Johnson (WFJ) and Sandy Frucher for your support during my time on the Philadelphia exchange (PHLX).

Thank you to Mike Omilinski, Justin Kanda, and Eric Lewis. I didn’t know anyone in Philadelphia, and you were true friends.

Thank you to Steve Cheseldine, Larry Gage, and Sean Kinney. You backed me up as the industry shifted. You helped me learn how to manage index risk. You were patient and put up with my personal turmoil. I wish I was a better version of myself during those years. You helped me understand that we’re not defined by our P&L. I’m grateful for your friendship.

Thank you to Steve Yurman – working with you reminded me that I had a good grasp of how to manage risk. You trusted me and my ideas, and it helped me believe in myself again.

Thank you to Dr. Russell Rhoads, Peter Lusk, Marty Kearney, and Deb Peters. You made my transition into derivatives education so much fun. Thank you to Gina DeRaimo for pushing me to refine and improve my skill set. Thank you to Rick Rosenthal, Michael Izhaky, and Danny Jisa (just to name a few) for expressing appreciation for my writing. Thanks to Ally Szakats for your incredible editorial prowess.

More Recently

The past couple of years have been tumultuous in a different way. I’m reminded that change is the constant, but the rate of change ebbs and flows.

Dark clouds may hang on me sometimes
But I'll work it out

Thank you to John Black, Greg Ferrari, and Kevin Kennedy for making me part of Nasdaq’s Index options team. Special thanks to John for making that group feel so much like a team. I admire the way you lead from behind. You consistently elevate those around you in a genuine way. You extend credit liberally and eschew it personally. I’ve never felt more connected to a group despite our physical separation. You’ve facilitated that kinship from my first day.

I’m fortunate to be surrounded by amazing teammates. The “next generation” at Nasdaq is exceptional. Thank you to Seamus Scaring for patiently answering so many questions. Your future is incandescent.

Thank you to Pranav Ramesh and Eleanor Yu. Your intellectual curiosity and quantitative prowess will serve you so well. It’s a pleasure to be on your squad. Thank you to Nick Smith for tirelessly figuring out where and how we can grow the reach of Nasdaq’s index options. Thank you to Elizabeth Coogan and Carey Hocker. From a marketing perspective, I’ve never worked with better. Beyond that, you understand the big picture across an even bigger organization.

Thank you to Nasdaq leadership for investing in the index options suite. Good things are in store.

Thank you to those who follow my work. I don’t want to be anyone other than me.

Enjoy (arguably) the best holiday.

Míle buíochas! (Gaelic)

A thousand thanks!