The Algorithmic Advantage 030 - Wayne Himelsein - Logica Capital Advisors
Dec 4, 2024
Wayne Himelsein, the President and CIO of Logica Capital Advisors, specializes in long volatility options trading strategies. He discusses the balance of systematic rigor with human oversight in trading. Wayne explains his gross long volatility approach, focusing on full protection during market downturns. He also highlights the importance of navigating realized and unrealized volatility, and the psychological aspects of market behavior. Wayne offers practical tips for new options traders, emphasizing foundational knowledge and strategic adaptability.
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Early Trading Experience
- Wayne Himelsein skipped his Berkeley graduation to pursue trading in New York.
- He shadowed traders for six months, observing diverse strategies and the unifying experience of losses during market corrections.
The Grand Delusion of Mean Reversion
- Most traders unknowingly share the same risk exposure, leading to widespread losses during corrections.
- This realization led Himelsein to pursue long volatility strategies, aiming to profit from market downturns.
Convergence vs. Divergence
- Convergent strategies underestimate the risk of divergence, leading to substantial losses.
- Divergent strategies, like long volatility and trend following, offer positive skew and better risk management.
