Episode 87 ... Tom Sosnoff (60:58)
Aaron recommends Sosnoff’s Ted Talk
Caddying 18 holes is called a "loop"
Jimmy Rocko, his caddy master, grifted him out of all his earnings, cheap life lesson
Current generation way too risk averse
Current generation has too much student debt, makes them scared
Take risks when you're young ... it's common sense
Risks usually aren't efficiently priced
Graduated college in summer of 1979
Wanted to work for a lobbyist but couldn't find job
Worked for Drexel Burnham right out of college, fall of 1979
"Bullshitted his way" in
Pre-Milken, he was long gone before the collapse of Drexel
Gold and silver exploding then
Stepped on floor of CBOE and knew that's where he belonged
National Semiconductor (NSM) pit, first words to him: "f-ck you!"
Trading floors: all alpha males, strong egos, independent, grifters -- fit his personality
Spent 20 years on the floor of CBOE
3-5% of the people they hired made it
He just got lucky and made it
Only instruction to trainees was "go make some money"
Couldn't outsmart anyone so tried to outwork them
Made enough money so he could build ThinkOrSwim
The only way to make money with options: trade small, manage profits, sell options naked
All about creating a statistical chance of success with options
No such thing as a quantitative model that can beat the markets
Market making models (and HFT) can beat the market, but that's it
The world prices everything perfectly -- no free money, no edge out there
Derivatives overprice for fear, take advantage of this opportunity
Sell high implied volatility
There are people who make money, but they're outliers
Can't steal money from your customers anymore, this is how people used to make money
Be product and strategy agnostic, all your focus is on liquidity
Manage your winners, forget about your losers
Learn all about implied volatility, learn how to sell premium
Price is not mean reverting, but implied volatility is
He's on pace to do 10,000 trades for the year (2016)
Start young and start small and learn
If you can order a pizza, you can trade. It's not rocket science
100,000+ tastytraders [not sure what this means? active viewers?]
Markets 35 years ago were inefficient
Individual investors today at no disadvantage to professionals -- fees, technology the same, only know-how different
Trading psychology is 100% bullshit
We make people feel good about their lack of know-how
People aren't successful because they don't take the time and the commitment to be successful
Industry makes money by managing other people's money
There's no psychological element to blackjack or even poker (it's all mechanics, playing by the book)
He stood in the same two foot spot for twenty years in the pit
Saw the hurricane coming and wanted to be the first one out
Scott Sheridan his partner ... hired great technologists to build ThinkOrSwim
Hired smart people to execute their vision
He didn't see his family for ten years while building ThinkOrSwim
Built a great company and product
Didn't want to sell ThinkOrSwim, but it was a public company and TD bought them out
Sold ThinkOrSwim for $750MM
Went to CEO of TD Ameritrade and told him he wanted to leave
Built tastytrade, which is a media company, profitable since Day One
In order to trade for a living: you need capital and need to know what you're doing, stay small
His biggest revelation was that he was trading too large ... got smaller, got successful
Eight hours a day of live content on his website every day, tens of thousands of hours archived
Website: www.tastytrade.com