Rhody Trader

A former colleague of mine is a big time trader. Actually, I should restate that a bit. He was co-founder back in the early 1980s of the company I for which I work.  He’s a fellow Rhode Islander (yeah, another Rhody Trader ) and someone I consider a mentor. Back when I was new to the company he and I often rode the train home together. Needless to say, being able to listen to him share from his wealth of experience (and bad jokes!) was a huge benefit to me as a young professional.

When I say he trades big, I mean BIG. You won’t find many individual traders operating at his level. He’s active in all kinds of markets, with different objectives, and in size. For example, the last time I visited with him in his office (he left the company I work for and started up a new venture several years ago) he told me a story about making $1,000,000 in profits on one stock trade in the past.

The big trade he’s in now is Cotton futures. He’s been telling me about it for a few months and has been in longer than that. I think he said he bought the Dec. contract at 58. It could be that I’m off in my recollection and that it was a bit higher, but regardless, he’s made great profits givent Cotton’s run up of late.

Here’s what makes a guy like him really special. He thinks of things in trading that a great many of us wouldn’t. In this case, when Cotton reached it’s recent peak he decided to take some money off the table (he sees it eventually going much higher still). Rather than just selling off some of his position, though, he actually sold calls because the implieds were upwards of 70% on the options. In doing so he was able to effectively sell at a higher point than he could have in the contract itself.

If I remember, in a future post I share what he did in Gold to dramatically increase his profits.

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