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Gamma On
Gamma On EP4: Gamma Godfather Cem Karsan's Second-Derivative Philosophy
Dec 3, 2024
Cem Karsan, known as the 'Godfather of Gamma' and an expert on volatility, joins Oliver Renick and Shane Skinner for an insightful discussion. They dive into the complexities of options trading, emphasizing the importance of second derivatives like Vanna and Charm. Cem challenges the phrase 'Tail Wagging the Dog,' arguing for a deeper understanding of market dynamics. They also tackle the role of interest rates, inflation, and even the intersection of populism with trading culture, ensuring an engaging and informative conversation.
45:30
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Quick takeaways
- Cem Karsan emphasizes the evolution of the options market since 1998, highlighting its increased sophistication and volume due to diverse products.
- Understanding metrics like gamma, vanna, and charm is crucial for traders to navigate market conditions and make informed decisions.
Deep dives
The Evolution of Market Analysis
The guest discusses his journey in the options market since starting at the Chicago Board Options Exchange in 1998, highlighting how the market landscape has evolved over the years. Initially, options trading was limited and less sophisticated, characterized by lower volumes and quarterly expirations, but this has significantly changed with the introduction of more diverse options products. This evolution has not only increased trading volume but has also fostered a deeper understanding of market mechanics, allowing traders to develop more effective strategies. The guest emphasizes that despite the advancements, fundamental driving forces behind market behaviors remain consistent, reflecting the need for a solid foundational grasp of options concepts.
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Discover
highlights
Listen to the best highlights from the podcasts you love and dive into the full episode