4 years removed — a reflection on my biggest bet

Moontower Munchies #102

Friends,

I was out Monday night in SF with friends from Parallax and we realized it’s been exactly 4 years this week since I left. I gotta tell you, while I don’t miss having the job, I deeply miss the people. I deeply miss being an office (although I don’t miss the commute or the 4am mornings). I reference the film Clerks all the time, but my professional life felt like Clerks. Non-stop banter, friendly debate, and just sharing highs and lows on this little rowboat that we were all paddling in the same direction. Clearly that wasn’t enough for me to stay. The work itself felt stale and my heart wasn’t in. Nobody’s fault. It’s just a me problem. I had a sense that I could always get a job even if it paid way less so it’s not like had the spectre of starving kids hanging in the balance. So it wasn’t a hard decision ultimately. Uncomfortable? Yes. Hard? No. (Many decisions in life thead that particular needle — just think of the last time you had to apologize. You know what you have to do. And it will suck. But the suck passes.)

4 years. The time it takes to go from freshman orientation ice cream socials to graduation as the start date to your first job dancing in your head distracting you from the commencement speech. I can weirdly remember that. Followed by “I better remove the piercing from my chin”. Whaddya want? I was a 21-yr old meat shank. Sue me.

Anyway, it’s been a fair bit of wandering, lots of family travel (highly joyful but also too easy to rationalize), and way more writing. A habit I started and stopped a couple times over the years before having it stick during the last 2 years at the fund.

It was always the clue sitting right in front of me.

Besides being something I’m compelled to do, writing is an instance of something I feel I’m supposed to do. Whether it’s kids or adults, I love to watch others “unlock”. Writing is a way to do that with reach. If I could be useful in unlocking others while enjoying or at least tolerating it, then I figure things will turn out ok. Making it sustainable financially is a challenge but that’s as I like to say a “technical not existential problem”. I prefer that over “I’m making money but my soul feels like it’s piling on debt”.

I can say that because I’m older of course. There’s no shame in doing what you need to do to get ends meeting. In fact, if you can do that, while being stoked, you’re lucky. Congrats — doing what you love and getting paid for it is why we look at musicians and athletes with envy. It’s not the fame and celebrity. It’s the alignment.

Winding (and writing) my way to today

I was stoked for most of my career. Less so in the time before I left. Hence leaving. Writing gave me a clue that I could demonstrate value outside of a niche profession. This might sound like something small. But my close trader friends and I always shared a gallows humor about whether “this year was going to be the one we become realtors”. Trading is hard. The ultimate red queen. And she will likely break up with you before you can dump her. It’s not a knock on realtors, but if you’re willing to start at the bottom with a draw and no benefits, there’s always a spot for you. Our stop felt way below last sale.

But writing led to confidence. A CV that could convey competence by “showing your work”. If you’re looking to change your work, nobody cares how many contracts you’ve traded. It’s all sunk cost. The key was showing that the things that helped you excel in your first career where portable if you abstracted the skills. They’re not necessarily portable at the same price, but when you are taking a step back you’re trying to handicap your ultimate downside, not protect the status quo.

Writing was an instance of what I’ve been doing my whole career. Turning vibes into claims. Bridging observation to proposition. Managing risk, finding outs, reasoning — it’s all creative synthesis. Clear communication is a bridge from impression to price. Debugging statements as you traverse the distance from noise to a fair value. Writing, coding, deciding. They all feel related. The experiment of basically sharing in public brought the relations into focus. The opportunity to do that was fueled by a renewable arbitrage — teaching things one knows deeply to those who don’t by understanding where they’re coming from. My biggest advantage is not being a genius. A hardgainer doesn’t learn to lift from an alien like Ronnie Coleman. Writing, especially the feedback, confirmed my sense that I’m not a journalist or a novelist — I’m a teacher.

Which means that writing is just one form of expression in service of a wider mission. The meetings (most of which are not even about trading), the substack, the app, more recently the videos. It’s all an engine. It’s not mass market stuff. It’s only possible because of the long tail or Kevin Kelly’s idea of 1,000 true fans. Will AI end this approach? Possibly. Might it be strengthened because it’s human in a world of terminator slop? I hope so. It doesn’t seem any less risky to me than any other gig that relies on human expression. If the beta of human judgement gets sold to zero I’m not any worse off. And no matter what I was doing, I wasn’t gonna afford the rocket to immortality anyway. Might as well, ride this one out as a whole person.

Now

Today I get to stay engaged in markets but can think a bit more long-term rather than fight for pennies. That’s awesome work but it had a season for me (although I’d never rule it out entirely — selling tails at zero doesn’t compute).

I think of my “portfolio” as what I can work on to create lasting value plus a core asset-allocation where I trade around the edges whether it’s short-term stuff, or angel/advisory. It’s a lens to the world at large, a sandbox, and a canvas. Options are the shading pens. The moontower app is empowering finer discretion. There’s a trader inside that isn’t going away just because I gave up a seat.

Holistically, being able to unlock others, practice, share publicly, fully own my effort [and failures], plus not have an alarm clock works for me. As paranoid as I can be about the random number generator (option traders are damaged goods), I believe the world vibrates back what you give it. That’s the existential bet underneath it all. The biggest bet.

The recipe:

Listen. Try hard. Own when you suck. Cut off the tails on bouts of inevitable stupidity (like face piercings instead of face tattoos).

It ends up looking like service. If you skim a fraction of the surplus, you can sustain it. If you create a lot of surplus, you can go to Sizzler. And you will always be able to sleep at night.

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Recently, I’ve been fortunate to receive some thoughtful feedback from readers in light of the different modalities (writing, video, app). These testimonials, all shared in the past few weeks, highlight how ideas can connect theory to practice, spark new perspectives, and even accelerate the learning curve for those in the thick of it.

It I was overwhelmed when they came rolling in via quote-tweet, text message and DM after I shared that I got this note::

I need to compile every message where someone tells me about a prop firm telling a junior to go read🌙🗼 .

I never take it for granted that the "stoner dad" letter namesaked by a beer bust scene is read by the hawks of the trading world.

I was in the final round for CitSec and was recommended Moontower as a great read! I have been enjoying it ever since and would love to connect and learn more.

A few replies:

Very flattered to be the contra on these notes I received after that thread:

A Senior Trader’s Take

Originally posted on X by @CedarsHill

"I noticed this post from Kris earlier in the week and it has stuck with me. This is one of the most elegant implementations of Bayesian logic to trading options I have seen in my career. I worked at SIG and learned a lot of this stuff years ago, but it just sunk in at another level."

(Referring to this thread)

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From a Young Options Market Maker

"Hey Kris, your recent post walking through the probabilities/‘stabilizing & destabilizing moves’ implied by the NVDA call spreads really stuck with me despite zero relation to the single stocks world, mostly because it felt like a very visual way to grasp the intuition (and I usually suck at this kind of mental abstraction/visualization). Today by chance I was walking through skew on the desk with someone who isn’t really vol savvy (and in a totally different context, FX), and at some point I realized I was mostly borrowing from your logic about how it balances the odds between different areas of the distribution—I could literally see it ‘clicking’ for the guy (and he said so too). And in a way it ‘clicked’ for me too as I went through the concept with these new lens! Figured that was nice feedback to pass along as you recently posted about your work being recommended to juniors and trading desks…I can say from personal experience it would have made a hell of a difference in speeding up the learning curve back when I was in that position.

When I asked the trader if I could share this as a testimonial he replied:

Feel free to share it however u prefer. I can give you the full version of the praise—I’ve been a reader I think probably since year 1 (!), back then I was in my 2nd year on a vol desk (enough so it’s past that point where you feel like everyday you’re fighting not to drown, but not nearly close enough to really ‘seeing the matrix’ so to speak). The stuff you write is literally in the realm of professionals but explained in ways that anyone could eventually understand. There were multiple topics on which I would read your pieces and think ‘ok that condenses in a very intuitive way what I felt it took me many months doing the hard work of trading, controlling position spreadsheets, doing P&L attribution, before figuring out how it really is traded in practice, what are the thought processes, what are the practical pitfalls’. When I started I took the more difficult route of going through the tougher theoretical books first (like Rebonato’s) before getting to the more practical/intuitive ones (like Bennett’s) and before getting to the useful corners of ‘vol twit’ (and then your blog). For someone starting from scratch (and learning on the go) a bunch of stuff was really, really difficult to grasp—Moontower would be literally the first required reading I’d recommend because of this bridge between theory and the practical reality of its applications, there’s really no book or other blog that I know that offers that. For a few years now I don’t deal with vol stuff directly, but once you learn to see the world through options lens it’s the type of thing you can never ‘unsee’ afterwards, and I still don’t miss 1 post."

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From an Option Market Maker with 20 Years of Experience

"These videos are a really authentic sneak peek into the mind of a real options trader, must be neat to watch for people that have never sat on a desk. I watched that first one you posted and your Excel tool reminded me so much of the production pricing and risk management sheet I built over many years and traded off of from xxxx-yyyy.

Your content is amazing, consistently a must-read. So much of it resonates in drastic ways and makes me think hard about my life and my choices (which I already do, but enlightening to hear it framed by someone as thoughtful, humble and self-reflective as you)."

To the next 4 years. More usefulness. More unlocking.

Thank you for reading this stuff. I’d be a really bad realtor.

[I could just see myself…”You want me to get what for your house? Sold.” I’d never get a listing.]

Stay groovy

☮️

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