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Wednesday, April 8, 2015

Interviewing the Quants: Dan of Theta Trend

Welcome back to Interviewing the Quants. This is the third interview in the series. Many of you might know our guest from his blog on simple objective options trading. It is called Theta Trend. His name is Dan. He's provided some information to give us some insight into who he is, what he does, and how he does it.

(Note: If you enjoy the following, consider signing up for the free Gödel's Market Newsletter. Two more questions and replies from Dan will be released through the newsletter. For this exclusive content, sign up here.)

GM: What originally interested you about finance and the markets?

TT: I don't know that I ever remember not having an interest in financial markets.  When I was really young, I remember my Dad explaining how to read Stock and Bond quotes in the newspaper.  Note that this is well before the internet existed.  I was always more interested in Bonds than Stocks because I liked the idea of receiving interest payments, but I have been interested in markets ever since I was introduced to them.

GM: What caused you to move towards options?

TT: Towards the end of High School, I set up an account to day trade stocks.  It was sometime in the late 90's and I was hoping to skip college and become a professional trader.  At the same time, I started reading some of the McMillan options books and became very interested in options.  I didn't start trading options at that time, but I credit that for some of my background and initial interest.

When I was in Graduate school, I took a series of classes on trading and traded a small account of school funds.  During that time I began trading options because I liked the ability to construct position that needed to be less directionally correct.  I felt that options gave me a better a chance to win and I started combining options with other (mainly trend following) strategies.

GM: What type of hobbies, interests, and education background do you have?

TT: I have something of a one interest, compulsive personality and that's reflected in my small list of other interests.  Outside of trading, I love to cycle, run, and be active outside.  However, I have essentially no interest in any sport sport that involves a ball.  Do cats constitute a hobby?  I'm not sure, but I have two cats.  They seem to like me most of the time, which I view as a compliment.

My educational background is a little mixed.  I have an Undergraduate degree in Economics and a Master's degree in Accounting.  I spent the majority of my time in Grad school watching the markets during class and pretending Accounting didn't exist.  Strangely, after leaving Graduate school I became a CPA and worked as a Tax Accountant for 5 years.  That experience helped me realize that I genuinely dislike working as an Accountant and I recently left my job to move and also pursue something more market related.  There's a recent post on my site called, "What I've Learned From Living Wrong," that talks a little bit about my background and some of the changes I'm making.

GM: How long have you been trading?

TT: I have been trading on and off since the late 1990's and much more seriously since late 2007.  Even when I wasn't trading I was watching markets and reading financial/economic news.

GM: What are some fundamental ideas or principles that arise in your work?

TT: I believe that markets trend and that it's essential to validate trading ideas.  Additionally, it's incredibly important to always be asking questions and trying to learn.  It's equally important to ask why something is working and why something is not working in the markets.

GM: What lead you to start Theta Trend? Do you find benefit from discussing your ideas in a relatively open and public setting?

TT: On a practical level, I started the blog primarily because I wanted to have a discussion about combining Trend Following with Options and it didn't seem like that discussion was taking place.

I have benefited from the blog in more ways than I ever imagined possible.  The site has introduced me to numerous people and other writers who have an interest in markets.  Those relationships combined with writing and reflecting continue to make me a better trader.  I can't say enough good things about writing the blog; the experience continues to surprise me in positive ways.


To receive two more questions and answers from Dan at Theta Trends, sign up for the free Gödel's Market Newsletter. I will be sending them within the next few days.

Please thank Dan for the interview. For more information, insight, and knowledge, visit his site Theta Trend and check out his free guide to becoming a better trader.