Speaker 2
The reality is no matter how important risk management is, ultimately a fund manager is getting paid to take risk. So there has to be some plan to generate
Speaker 1
returns. When I'm trying to focus on is finding options that are, I think, mispriced, where I can get an execution price better than what I think fair value is for them. And I'm trying to do that over and over and over and over again and trying to capture edge. And of course, on top of that, I'm also trying to make sure I don't blow up. So to me, risk management doesn't mean anything if you're not capturing edge in the first place. So I see a lot of people pushing these stupid trading things on Twitter. Obviously, they've never bought anything, but I just see them. They're like, oh, this trade is risk one to win five. And therefore, it's got good risk reward and so it's a good trade. I mean, that's just such a horseshit because anyone can do any option trade with zero experience and set up that exact return if they wanted to. That doesn't matter. Getting a good risk reward on a trade is completely irrelevant. All that matters is, are you getting a right price compared to what they're, are you the bookie getting a good price on the action with some VIG or are you just being, you know, crossing a spread against a fair price? And I think that it's all about edge capture. Risk management just doesn't matter. If you don't have a way of generating edge, then it doesn't matter how you risk manage. So what I tried is the way we try to approach things is let's generate a lot of edge buying options, selling options, getting five to one, laying five to one, whatever it is. And then on top of that, we have to risk manage and make sure that the shocks are survivable and manageable.