Meet Chris Vecchio; Kayla & Errol

TRADER

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1 Bloomberg terminal 2 Editing latest “The Macro Setup” with Guy Adami & Dan Nathan

3 Blue Yeti microphone 4 Moleskine classic hard cover (notes on macro research and trading strategies dating back to 2013) 5 Wooden pen made from old Shea Stadium home dugout benches 6 Moleskine notebook (planner & trading diary)

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CHRISTOPHER VECCHIO

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Title Senior currency strategist, DailyFX

Home/Office location Lower Manhattan & Westhampton, New York

Age 32

Years trading 17

How did you start trading? I was 14 years old and I wanted my first cell phone, so my mother told me that if I invested some money, I could earn it. She’s a trust and estates attorney and does some angel investing, so she’s always had a sharp eye for the markets. She gave me some money and some choices, and I invested in Baxter International, a biotech company. When it went up enough in price, I sold to cover the cost of the phone.

Favorite trading strategy for what you trade

most? I don’t have the temperament to sit around day-trading tight ranges. My academic background is degrees in political science and economics, as well as earning the CFA (Chartered Financial Analyst) Charter by passing an exam that tests the fundamentals of investment tools, valuing assets, portfolio management and wealth planning. That gears me toward longerterm perspectives. So, I’m either looking for significant turning points in markets for long-term value plays or finding a trend I have faith will continue for several weeks or months. While I use spot forex in the currency space, my activity in equities and commodities is explicitly vis-à-vis options, such as call and put spreads, straddles/ strangles and, when I’m very confident, longdated on-the-money calls/puts.

Average number of trades per day?

Approximately 20 per month, so fewer than one per day. I usually trade in batches and then sit around for days at a time.

What percentage of your outcomes do you

attribute to luck? I typically outline my

FAVORITE TRADING BOOK

Against the Gods: The Remarkable Story

of Risk by Peter L. Bernstein Wiley (1998) Paperback, 400 pages strategy and expected returns ahead of time for each trade, going so far as to backtest the strategy using factor models to create an expected distribution of outcomes. If I find myself in a position where the realized outcome is in excess of three standard deviations of my average expectation (common practice for identifying outliers in Gaussian distributions), I attribute that to luck. There have only been two instances when that’s happened to me.

Favorite trading moment? My favorite trading moment came when the Bank of Japan intervened in the yen on Aug. 4, 2011, sending the U.S. dollar/Japanese yen currency pair from ~77 to ~79 in a few minutes. I was fresh out of college and doing things by the book. And I recalled a professor in college just months earlier telling me about his experiences around White Wednesday, or Sept. 16, 1992, when the Bank of England’s peg broke and they exited the European Exchange Rate Mechanism, which is why the U.K. doesn’t use the euro. He noted that he had orders laddered among different British pound-crosses that day, and he basically made his year in one afternoon. On a hunch, I laddered in long U.S. dollar/yen orders and, sure enough, I hit it lucky. That single trading event confirmed to me that studying market history would be beneficial in the long term.

Worst trading moment? On Sept. 6, 2011, I was short the euro/Swiss franc currency pair. When I arrived at my desk at 4:31 a.m., the Swiss National Bank had raised the floor to 1.2000. This was my first margin call. It was a hard but tough lesson, and I haven’t run the risk of ruin since. It was formative in understanding risk management early in my career.

TIKTOK DOUGH

Learning the Trade (PART 2)

Two Gen Z TikTok influencers are learning the fine art of trading stocks and options from a seasoned pro—and they’re doing it in real time on the tastytrade network

In the April issue, Luckbox readers met Kayla Kilbride and Errol Coleman, the beneficiaries of mentoring by legendary trader Tom Sosnoff, co-CEO of the tastytrade financial network. Their adventures navigating the options markets are streaming Mondays and Fridays at 1:30 pm Central on tastytrade.

How is your education coming along?

Kayla Kilbride: I feel more and more confident every day. I was reflecting on some of my very first TikToks this week and stumbled upon one where I made a joke about how I had no idea what people were talking about when they referred to IRA investments, equities and index funds. With that said, I feel like my investment education is coming along very well! Errol Coleman: My investment education is going very well because of being able to rewatch the previous Two Yutes episodes!

What’s been your biggest win thus far?

Kilbride: My biggest win was a trade I made a few months back with the Small Exchange precious metals index, /SPREH21. I made $162. Coleman: My biggest win thus far has been $338 on PayPal. I sold a put spread and closed the position six days later.

Do you feel more like a gambler or a prudent investor?

Kilbride: Trading based on statistical

More Kilbride & Coleman

Watch The Two Yutes outcomes instead of narratives or technical patterns has certainly made me feel less like a “gambler.” However, I want more opportunities to test my prudence or discipline in my investments before I consider myself a “prudent investor.” Coleman: I feel more like a prudent investor because I am trading off of probabilities— trading small, but trading often.

Do you think absolutely anyone can learn options trading?

Kilbride: Oh my goodness, yes! If I can do it, anyone can. I am still getting terminology mixed up and backward all the time. Nonetheless, I’m learning new things every week and getting better with every trade. Coleman: Yes, 100%. Anyone can learn if they put the time in. After that, it’s rinse, wash and repeat.

Which investment vehicle do you enjoy trading most—stocks, options, futures

Errol Coleman and Kayla Kilbride hang out with Tom Sosnoff at the tastytrade office in Chicago

or cryptocurrencies?

Kilbride: I have had significantly more success trading futures, but they scare me more than options, stocks and crypto combined. Ironically, because they have been my most successful trades, I enjoy them the most and keep going back to them. Coleman: I am enjoying stock options the most, but I am looking forward to getting even more involved with trading futures.

What do you feel is your most valuable lesson from Tom Sosnoff to date?

Kilbride: Most of my confidence has come from trusting the tastytrade mechanics and then committing to learning along the way, as opposed to the reverse of that statement (learning and then trusting). Coleman: My most valuable lesson from Tom is that what happens on the market is not your fault. You cannot control the direction of the market, but we can choose to apply our mechanics and stick with them.