Jul 20, 2022
Old Trading Methods are Out-Dated, Now there's Outcome Trading w/ Peter Harrigan
- BRT S03 EP33 (132) 7-17-2022
Things We Learned This Week
- Democratizing expertise around trading derivatives thru new tools & software. Reengineering the derivatives market, so we do not need to rely anymore on failed experts w/ outdated methods & tech.
- New World: Outcome Trading™- Hedgers simply graphically draw a curve describing the monetary compensation they require in a trade if the price of an asset were to decline (or increase).
- Trading Tech is an upgrade to traditional Commodities markets that are restricted, that will be available to everyone worldwide to use
- Crypto Trading of BTC & Ethereum to start. Quick setup of trades, use Crypto wallet to secure. No margin Calls – fully collateralized trades, using Stablecoins with asset backing
- Much of the world does not have access to derivatives markets (no hedging on investments), Hedging platform for businesses in places without good financial markets.
Guest: Peter Harrigan – Co-Founder Outcome Trading
https://www.linkedin.com/in/peterharrigan/
Outcome Trading –
old world: derivatives
In today's world, risk transfer is achieved through derivatives, using highly specialized language, and opaque structures which pre-date modern information technology. Centralized financial institutions focus on high volume markets that ignore the long tail.
new world: outcome trading™
Hedgers simply draw a curve describing the monetary compensation they require if the price of an asset were to decline (or increase). Investors graphically describe the financial outcome they desire from price appreciation (or depreciation).
Democratizing expertise around derivatives through new tools and software. How failure by experts impacts us all Protecting oneself or one’s business in high-volatility markets Reengineering the derivatives market, starting from a blank sheet of paper
Bio:
Peter Harrigan
Peter is the Co-Founder of the game changing trading software, Outcome Trading.
Peter also has founded Grey Swan Digital which developed the technology behind PlastiCurv. PlastiCurv was developed to transform financial risks into opportunities - opportunities for return, diversification and social benefit. Peter’s mission was to create an intuitive and visual platform that anyone can understand, re-engineering the $600T derivatives market and making its benefits available to anyone in the world.
Peter’s long and successful career as a trader started when he developed a tradable arbitrage employed at the CME and CBOT. Peter later made markets in foreign exchange at Bank of America, currency options on the floor of the CME, and equity options on the floor of the Pacific Exchange. He also co-founded Sentient Technologies, a company developing commercial applications of a highly distributed
evolutionary learning technology. After a successful exit from Sentient, Peter turned his attention to the crypto industry in 2014, attending the first ethereum meetups, & going on to participate in the Ethereum presale.
Notes:
Arbitrage strategy in 1980’s
Call broker and put in order
Market squeezed our strategy
B of A, work in pit CME
High Frequency Trading –
Outcome trading – drag and drop method – draw curves to get outcome
Costs / profit and losses
Crypto and wallets needed
No margin call – fully collateralized. Stablecoins with asset backing
Trade setup is quick
Crypto BTC and Ethereum
In long run – add to new indexes
Less liquid markets
Probably no options on smaller crypto
ETFs of BTC and ETH based on futures, hot costs – not a pure ETF
Nick Carter – Stablecoins
Tether held, Luna decreased folded
Analogy of subprime loans with Luna
Stablecoin collapse / Terra
People have to keep learning lessons.
DAI Stablecoin
Hedging
USDC on chain –
Movement of money in developing world – i.e., Africa
U.S. has financial markets and banks, not the case worldwide. Spoiled.
Derivatives markets started in mid-west with commodities for futures.
Pre-sell your products
Mid-west didn’t have NY financial markets.
Real estate largest asset class, but not good derivatives market.
Non-linear and customizable derivative
Developing countries still using dollars – use derivatives to hedge BTC with a wallet.
Platform for people with less financial infrastructure –
Adoption – jumps curves, like cell phones.
Hedging platform for businesses in places without good financial markets.
Who is other side of the trade – to finalize trade – both sides put in AMM (Automated Market Maker)
Counter party risk
No margin calls
Manage risk
Leverage built
Wrecked – 20 or 50:1 lev. Depends on instruments used
Stocks – 2:1
Real estate – 20:1
Crypto?
Series of call or put spreads to cap loss
Inflection points in curve
4#’s –
Collateral for trade
Premium
If goes up
If goes down
Power of visual
Model it and believe will not happen
Every market has a limit
Replay Clip from:
Options vs Stocks & Trading vs Investing w Tom Sosnoff of tastytrade
Things We Learned This Week
- Implied Volatility & Time Decay – options begins with volatility, on a clock so Mechanics (forget mind set) on how to setup a trade is key
- tastytrade is a media network based on Math (Probability & Statistics - Look at the Math), trading & focus on markets
- Limited Profitability & Unlimited Risk when you Sell Puts w/ 80% chance of success - Be a Seller of Options – let Market beat you, slight edge
- Trade Small, Trade Often - Law of Large Numbers w/ 45 DTE Strike Price of 1 SD – Exit or Roll at 21 DTE
- Options Trading Teaches Life Lessons – Important to: take risks, learn to take risks, make quick decisions, be decisive about those decisions.
Guests: Tom Sosnoff, founder & CEO of tastytrade
https://twitter.com/tastytrade
FULL SHOW: HERE
Tech Topic:
https://brt-show.libsyn.com/category/Tech-Startup-VC-Cybersecurity-Energy-Science
Crypto / Blockchain Topic:
https://brt-show.libsyn.com/category/Crypto-Bitcoin-Blockchain
‘Best Of’ Topic: https://brt-show.libsyn.com/category/Best+of+BRT
Investing Topic: https://brt-show.libsyn.com/category/Investing-Stocks-Bonds-Retirement
More 'Best of Investing': Here
Thanks for Listening.
Please Subscribe to the BRT Podcast.
Business Roundtable with Matt Battaglia
The show where Entrepreneurs, High Level Executives, Business Owners, and Investors come to share insight and ideas about the future of business. BRT 2.0 looks at the new trends in business, and how classic industries are evolving.
Common Topics Discussed: Business, Entrepreneurship, Investing, Stocks, Cannabis, Tech, Blockchain / Crypto, Real Estate, Legal, Sales, Charity, and more…
BRT Podcast Home Page: https://brt-show.libsyn.com/
‘Best Of’ BRT Podcast: Click Here
BRT Podcast on Google: Click Here
BRT Podcast on Spotify: Click Here
More Info: https://www.economicknight.com/podcast-brt-home/
KFNX Info: https://1100kfnx.com/weekend-featured-shows/
Disclaimer: The views and opinions expressed in this program are those of the Hosts, Guests and Speakers, and do not necessarily reflect the views or positions of any entities they represent (or affiliates, members, managers, employees or partners), or any Station, Podcast Platform, Website or Social Media that this show may air on. All information provided is for educational and entertainment purposes. Nothing said on this program should be considered advice or recommendations in: business, legal, real estate, crypto, tax accounting, investment, etc. Always seek the advice of a professional in all business ventures, including but not limited to: investments, tax, loans, legal, accounting, real estate, crypto, contracts, sales, marketing, other business arrangements, etc.