Trump launched a memecoin on Friday night. One wallet (presumably his) owns 80% of it. At the time I’m writing this, he’s $24B richer.
You read that correctly. “B” like 🐝
Anyway, there’s a vesting period and no obvious way how he can monetize this without crushing the price. Maybe he can force a bank or another country to accept it as loan collateral. Or maybe he can demand the Treasury to buy it to diversify strategic reserves like its gold.
I’m kidding. I don’t think he can do such things. But also, if there’s a will there’s a way and I suppose a man named “Trump” ridin’ the mother of all heaters is some kind of cosmic onomatopoeia.
Anyway, this brings me to 2 tweets I saw pretty close together on the timeline.
In the early 2000s, I was in a fantasy football league that didn’t have a waiver system. Free agency 24/7 all week. The rules rewarded crackheads who followed football every second, ready to jump online to secure Denver’s backup RB when the starter’s knee exploded live TV. In other words, derelicts like myself who didn’t have a family in their 20s.
Today, I would never be in such a league. Not my speed anymore.
In fact, one of the reasons I left full-time trading was because it’s out of phase with how I want to live. I was never a news junkie. Having a job that required you to be on top of the news became an energy-suck. Playing a video game Trading for Living has a particular cadence.
Cadence. Rhythm. These are important dimensions in matching yourself to what you do.
Trading is different than a lot of desk careers. It’s a bell-to-bell job. Not a lot of homework. No deadlines.
But the best trade of the day can happen at 10:04 in the morning and if you were in the bathroom, you might as well have stayed home. Need to run an errand midday or meet someone for lunch? That can wait. For 30 years. You might make millions but you’re chained to a desk like a 9-year-old who has to raise her hand to go to the bathroom.
The point isn’t to say what’s better or worse. It’s just that trading has a pace and if you like to read peacefully, deliberate decisions slowly, and avoid paranoia you will find the environment stressful. Not to mention the boredom. A trader is like an EMT or firefighter on a slow day. Waiting but ready. Boredom is major problem for exactly the kind of people who think trading would be a great way to be in the action. You fold a lot of hands. But that takes discipline. Lapses in willpower or even a lack of sleep can seduce you into “loosening” your starting requirements to see the next card.
Those tweets above combined with FOMO and the proliferation of “if you can’t beat em, join’em” rationalization is gonna lure people towards spending their brain cycles on things that will feel deeply unfulfilling and that they are poorly matched to.
If you’re a financial thrillseeker these times are for you. If you are a builder or craftsperson, technology tools are accelerating. More power at your fingertips.
Either way…let your focus anchor you.
Why do you do anything? Maybe go a few whys deep. The alternative will be being battered by the waves. Adrift. And angry. There’s going to be a lot of games happening in front of your eyes. Some say there always have been, at least now it’s out in the open. Touche. But there are consequences to that too.
Are you better off or worse off?
It’s a deeply personal question. I am increasingly of the belief that within a decade, your own whys will be the only questions. We are leaving a world where people (at least people with the luxury to read substacks) just compile their parent’s script. Doing things because it just seems like the next thing to do.
It won’t make sense to do that in the same way it doesn’t make sense to describe a color as round or a chord as wet.
A musing by a reader
I am sharing this with permission from a professional option mm who sent it to me. I deleted any identifying info. The person has been reading moontower for a long time and was graciously sharing.
Thought I’d share a few things I’ve learned. Most will be obvious to you, but maybe a nugget in here for one of your posts.
1) Starting with the obvious: market making is the hardest way to make an easy living. You can grind it out every single day scraping away ticks for edge, and at the end of the day your outcomes are decided by liquidity and volatility. They’re the two things you can’t control, and they’re the two things that determine your fate. This isn’t true for everyone, but it’s certainly true for [redacted].
2) I firmly believe that actively trading is not sustainable for sane human beings. Managing an options portfolio is like taking care of a baby. It’s a living organism that constantly needs to be tended to. If you neglect it, it will die. The amount of mindshare it takes up and context-switching is just simply unmanageable over long periods of time. The intensity it takes to perform at your best during market hours takes a beating on the human body. The guys on my team are [ages redacted] and look like they’re [redacted]. Besides a few partners, I don’t know a person here that doesn’t have a drinking problem. This is anecdotal, but I see it from other groups too.
3) Trading vol is easy. Managing a position is hard. I’m convinced you need to be borderline OCD to manage a book. Between the pruning of positions and the fine-tuning of the model, you have to have an insane attention to detail to get an acceptable slide.
4) You’re always underpaid until you’re a partner or PM. I won’t go into detail on this one because you did a whole blog post on it (maybe it was just a tweet idk). I’ll just say that you nailed it.
[Kris: See Getting Less Screwed On Compensation and adverse selection in the option job market]
5) Like most things, luck is the difference between 0 or hero in this industry and it doesn’t matter if you trade long or short. I’ve seen groups blow up in a matter of days. I’ve seen groups that should’ve blown up and then came back to make a fukin stupid amount of money from continuing to hold short.