I like to say that you learn the most in markets by studying the periods when things go horribly wrong. And in this spirit, Alpha Exchange guests are often asked to reflect back on risk events of great consequence. 2023 marks the 25th anniversary of the LTCM fiasco, an event too long ago to matter for anyone under the age of 40, even as there are valuable lessons to be had from this giant portfolio unwind. As we look back on this vol event from 1998, it was a pleasure to welcome Nicholas Dunbar, author of “Inventing Money: The Story of Long Term Capital”, to the podcast. With a background in math and physics and with a long stint at Risk Magazine, Nick was well equipped to explain how the effort to conquer markets through the science of derivatives ultimately failed. Along the way, he provides a brief history of how option theory has developed, brings to life key players in the story and dives in to technical details of LTCM’s trades. We learn about the dangers of models, leverage, hubris and crowding all at once.  I hope you enjoy this episode of the Alpha Exchange, my conversation with Nick Dunbar.