Primer #1: Introduction
moontower.ai Primer #1
As promised, moontower.ai includes a primer which is being dripped 1 post a week right here on substack.
Sign up to get early access here.
An Introduction by Kris Abdelmessih
I spent 12 years making option markets in equities, indices and commodities on the various trading floors in NYC, followed by a 9 year stint building and running a commodity options trading business for a leading volatility hedge fund.
Institutional options trading is a low-margin, scale business. I was regularly trading the equivalent of 100k equity options a day through a combination of electronic algorithms, click trading, and "voice" (ie broker) deals. This is a technical, high-churn business that relies on costly infrastructure, proprietary relationships, favorable funding, lowest tier commissions and clearing costs, and significant capital.
Casinos are handy analogies. You are flipping coins with a tiny house edge for millions of dollars. You need to be sure of your edge and have enough samples for the signal to swamp the p/l variance.
Just as a “sharp” or “advantage player” in the gambling world (ie blackjack card counter) does not try to replicate the casino business, moontower.ai is not an attempt to turn your home office into an HFT shop.
💡moontower.ai is inspired by a professional options approach but tailored for retail or fundamental investors. See An Example “Options Relative Value Trading Framework”
We integrate the core principles that underpin edge to craft an approach that suits our own goals
1) The core principles are the “science” part of investing
Understanding how the products work. We will focus on options.
The concept of theoretical edge
How to measure and compare
2) Personal needs and goals
Our advantage is our lack of obligation.
Unlike a fund with a mandate and responsibility to investors, employees, strict compliance standards, and counterparties, we aren’t pressured by high antes or external expectations.
Our goals are the “art” part of investing. Your trading activity serves your life, not the other way around.
You will learn to select the risks you want and discard the ones you don’t.
When we bring these truths together you will start to see prospective trades as a funnel. Sometimes you will observe things in your life or read something that sparks an investing inspiration. You can start from the idea and zoom out to contextualize if the market agrees or disagrees. Other times you will simply look at a snapshot of the market and find dissonance. Dissonance is great. Dissonance is a clue.
Regardless of your starting perspective, moontower.ai allows you to “see”. To find contradictions. To surface trades you hadn’t considered. To keep you from doing trades that are not as attractive as you thought.
In short, it helps you make decisions that harmonize with your goals.
This primer is divided into 2 units.
Core Philosophy
A conceptual foundation that roots your understanding in timeless principles about trading and options.
Implementation
A practical walk-through that addresses the specifics of prospecting, trade expressions, execution and risk.
To learn more, go to moontower.ai
looks amazing !
This looks incredible. This is the first thing I've seen in a year or so that I'd consider paying for. Differentiated and reasonably priced. Signed up for early access.