Monetary Matters with Jack Farley
Inside the Secret World of Prop Traders | Noel Smith of Convex Asset Management
Dec 17, 2024
Noel Smith, Founder and CIO of Convex Asset Management, is a seasoned proprietary trader who has shifted gears to hedge fund management. He unveils the lucrative secrets of prop trading, emphasizing why it often yields higher returns. The challenges of raising capital surprise him, as do the essential roles of relationships and likability in achieving success. Smith also delves into volatility trading strategies, the predictive power of options, and the unique hurdles faced in biotech stock trading, all while highlighting the importance of adaptability in today’s market.
55:33
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Quick takeaways
- Proprietary trading allows for agile market responses due to personal conviction, distinguishing it significantly from the accountability-heavy fund management approach.
- Building rapport and trust with potential investors is essential for hedge fund capital raising, prioritizing likability over merely showcasing performance.
Deep dives
Proprietary Trading vs. Fund Management
Proprietary trading allows traders more freedom to execute their strategies, as it involves trading the firm's money rather than managing clients' funds. In proprietary trading, decisions are often driven by personal convictions, enabling traders to adapt swiftly to market conditions. The distinction between proprietary trading and fund management lies in the accountability to investors, where fund managers must adhere to stricter guidelines and regulatory obligations. Understanding this difference is crucial for grasping the operational dynamics within these two sectors.
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