Retail to Institutional: How David Sun Scaled His ODTE Options Strategies

The Derivative

In this episode, Jeff Malec sits down with David Sun, an entrepreneur, trader, and fund manager with a unique journey into the world of options trading and alternative investments. David shares his unconventional path, starting as a retail trader experimenting with options strategies, particularly selling puts, before transitioning to professional fund management. He discusses the challenges and lessons learned as he navigated various market regimes, including the 2018 and 2020 downturns. The conversation delves into David's systematic approach to options trading, focusing on risk management techniques like stop losses and hedging strategies. He explains his evolution from primarily selling options to incorporating more option buying, as well as his exploration of zero days to expiration (zero DTE) options and the unique risks and considerations involved. David also shares insights into the role of behavioral biases in the markets and how he leverages data-driven research to develop robust trading strategies. He reflects on the increasing accessibility of trading tools and resources, and the valuable contributions of the retail trading community.

Chapters:

00:00-02:08=Intro 02:09-09:21= Engineer to Retail trader to Fund manager – an unconventional path

09:22-18:21= Don’t quit your day job & Option-based fund management

18:22-26:09= Mitigating gamma risk in short-dated options & Focusing on the win rate

26:10-35:47= Exploring behavioral biases and combining systematic & discretionary styles

35:48-45:39= Democratizing trading: Hedging, Volatility, Trend, and Broken butterflies

45:40-57:11= Sharing knowledge and resources: The Trade Busters podcast & bridging the gap

57:12-01:07:18= Naïve to Trends, momentum, edge? & the human behavioral bias

From the episode:

Fooled by Randomness (Book)

The Derivative episode: WTF?! Will 0DTE Cause Gammageddon? With Mike Green and Craig Peterson

Smartless podcast

Follow Along:

Follow along with David on Twitter @TheTradeBuster and also be sure to check out The Trade Busters podcast

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