Martin Kronicle

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Larry’s new book Trading Options in Turbulent Markets is one of the most clearly written books on options that I’ve ever read.

Based on his 25 year career as an options trader, Larry starts with some simple concepts and takes the reader through multiple option positions such as back spreads and ratio spreads. I learned a lot from this book and I’ve been dealing with options throughout my career. This book is very well written and will make a great textbook for an aspiring options trader – a great reference book – a keeper.

Some items that are especially juicy:

- probabilities don’t matter with options
- where and how novices get killed (things to avoid)
- how pros make an asset class out of theta (things to do)
- misconceptions about cheap options

Total length is about 25:34.

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A reader asked to interview me about 6 months ago. I didn’t see the benefit at the time, but I get enough questions that I thought I might give it a go. The interviewer is a reader of MartinKronicle and he did a great job for someone with no experience. His name is Gavin Murphy – an Irishman – living in London and we recorded the call via Skype.

In the interview I answered a lot of great questions that I think emerging CTAs and aspiring Prop Traders can benefit from. I hope that I’ve taken on and dispelled enough of the conventional wisdom and what I believe to be misbeliefs in developing your career and how to learn about trading.

Among the topics are the misconceptions of the benefits of trading a system versus specializing in one commodity, what indicators are overrated, another way to consider the ATR, and how to employ the Grúdlann Gheata Shan Séamuis emotional stop-loss system.

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Mike Bellafiore and Steve Spencer are the founders of SMB Trading. Bella and Spencer, along with their colleagues Adam, Roy, ZMush (Z$, Mush, Mushy, Z), JThoma, GMan, are prop traders and have one of the best training programs in the country.

I spoke with Mike about his new book One Good Trade: Inside the Highly Competitive World of Proprietary Trading (Wiley Trading), and the SMB training program.

They also maintain a blog at SMB Training that I recommend.

You can follow SMB Capital on Twitter.

Chris Gillick, a current friend and former colleague of mine at Trader Monthly, helped Bella write this book. Gillick also wrote an article on SMB for the October 2008 edition of the magazine called Three Rules: Motion Detectors which can be found under the Press tab on their blog.

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“Truths are first clouds; then rain, then harvest and food.” — Henry Ward Beecher

For the most part, I trade exchange-listed commodities, but there are dozens of commodities that don’t trade as such. The most important one of them is water. The growing 21st century “water gap” between supply and demand is going to have major ramifications for the entire planet.

There is the potential for the world to go from abundance to scarcity within 25 years. What does the world look like in 2050 when there are an estimated 9 billion people inhabiting the earth and they all want healthy food, hot showers, running water in their homes, and effective sewage? Will we create a “water footprint” and trade water conservation credits, not unlike the carbon market?

Water as Political Capital

On one hand we need large urban centers to begin aggressively conserving water, while on the other hand there are hundreds of millions of people in India and China who do not have running water. This is a global issue that’s not making enough headlines — and it needs to.

Colin Chartres is the co-author of Out of Water: From Abundance to Scarcity and How to Solve the World’s Water Problems and is the Director General of the International Water Management Institute (IWMI).

Colin’s book, co-written with Sam Varma, blew me away — as did this interview. I highly recommend the book.