Trend, Prop, and Being Allergic to Optimization with Bill Gebhardt of 10Dynamics

The Derivative

In todays episode, Jeff Malec sits down with Bill Gebhardt, the founder of 10 Dynamics, to discuss his interesting career journey and the development of his unique systematic trading approach. Bill shares his background, from working on the floor of the CBOE in the early 90s to earning a PhD in finance and transitioning into the energy trading space. He provides insights into the evolution of the commodity markets, including the rise and fall of Enron, and the challenges of maintaining an edge in fundamental trading. The conversation then delves into Bill's transition to systematic trading, sparked by his exposure to a successful systematic team at his previous firm, Trailstone. This led him to develop the 10 Dynamics model, which is built on 10 core signals that closely mirror Bill's own decision-making process as a trader.

Bill explains his "allergic to optimization" philosophy and the benefits of using multiple time frames to generate positions. He also discusses the importance of risk management, operational efficiency, and adapting to changing market conditions. Throughout the episode, Bill shares his unique perspective on the markets, the role of human behavior, and the future of systematic trading. This insightful discussion offers valuable lessons for both aspiring and experienced traders looking to navigate the complex world of alternative investments. Buckle up, because this conversation is about to "send it" into the world of alternative investments.

Chapters:

00:00-01:40= Intro

01:41-4:18= Puddle jumping to across the pond / ski adventures

4:19-14:46= Quants, Derivatives, Energies & Enron: Starting 10Dynamics

14:47-31:55= Prop trader behaviors, philosophy 101, random walk paths & systematic approaches

31:56-43:39=Time frames – why they matter, deploying risk & flat investments

43:40-53:47= Models vs traders, Quant trading, fundamental filtering & never cherry picking

53:48-01:05:09=Mispricing, Alpha decay & Delta hedging

From the episode:

Whitepaper 10Dynamics: “The Freezer” – Automated Risk control systems for systematic trading 10Dynamics.com

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