Retail to Institutional: How David Sun Scaled His ODTE Options Strategies
The Derivative
Intro
This chapter explores the transition of an individual from retail options trading to fund management, emphasizing zero DTE strategies and the importance of ongoing learning in trading. It also examines custom metrics for risk-return analysis and the complexities of the volatility risk premium debate in trading.
In this episode, Jeff Malec sits down with David Sun, an entrepreneur, trader, and fund manager with a unique journey into the world of options trading and alternative investments. David shares his unconventional path, starting as a retail trader experimenting with options strategies, particularly selling puts, before transitioning to professional fund management. He discusses the challenges and lessons learned as he navigated various market regimes, including the 2018 and 2020 downturns. The conversation delves into David's systematic approach to options trading, focusing on risk management techniques like stop losses and hedging strategies. He explains his evolution from primarily selling options to incorporating more option buying, as well as his exploration of zero days to expiration (zero DTE) options and the unique risks and considerations involved. David also shares insights into the role of behavioral biases in the markets and how he leverages data-driven research to develop robust trading strategies. He reflects on the increasing accessibility of trading tools and resources, and the valuable contributions of the retail trading community.
Chapters:
00:00-02:08=Intro 02:09-09:21= Engineer to Retail trader to Fund manager – an unconventional path
09:22-18:21= Don’t quit your day job & Option-based fund management
18:22-26:09= Mitigating gamma risk in short-dated options & Focusing on the win rate
26:10-35:47= Exploring behavioral biases and combining systematic & discretionary styles
35:48-45:39= Democratizing trading: Hedging, Volatility, Trend, and Broken butterflies
45:40-57:11= Sharing knowledge and resources: The Trade Busters podcast & bridging the gap
57:12-01:07:18= Naïve to Trends, momentum, edge? & the human behavioral bias
From the episode:
The Derivative episode: WTF?! Will 0DTE Cause Gammageddon? With Mike Green and Craig Peterson
Follow Along:
Follow along with David on Twitter @TheTradeBuster and also be sure to check out The Trade Busters podcast
Don't forget to subscribe to The Derivative, follow us on Twitter at @rcmAlts and our host Jeff at @AttainCap2, or LinkedIn , and Facebook, and sign-up for our blog digest.
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
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