hall

of
fame

transcending markets, styles, cycles and instruments,
victor sperandeo
has earned a reputation as a trader’s trader

by michael martin

To the victor

74  TRADERDAILY.COM

taught traders and seed. is natural for me. and no ed traders — all while exhaustively researching one knew the tax implications. govies. He has traded all over the an olive-oil importer. Bill Miller’s 15-year string (through of gloom and turbulence roiling today’s markets. he ran the in neighborhood card games before landing at largest OTC options dealer on earth. patented financial ment. written books.” erman. mutating and looking to kill you. through several busts and booms.S. That stint was brief. he’s still managing money and finding of high school in 1966 as a quote boy at Pershing. you might try Trader Vic’s. I came to trading. He to restructure the young trader’s compensation lost 15 percent in 1991 to end his positive-­ arrangement. For a time. In August 1966.” but he has never rested on his achievements.” he says of the pervasive sense and kill you. who has companies. to this day. BY CHANCE. Ragnar. mai tai in Dallas. was marred by “In every other business you learn more and some down years. Options was making “He’s the total package. Yet those two negative postings manager. Sperandeo acquired fi- map.” says Ingo Heinen. The following year. Boone P ­ ickens extends to stocks.9 billion com­modities-management platform. he landed at U. “i was reared in and his long. Sperandeo’s bosses swiftly moved Sperandeo is not without blemish. bacteria: always during which he notched annualized returns of “I was reared in bear markets. named IF. traded his own work in Lehman Brothers’ private tax depart- money. Sperandeo documented his more as you practice your craft — except trad- streak (publishing audited returns) in his clas. then 26. he’s ad. streak. you were looking for the best Monthly Hall of Fame. you might (with all due respect to T. ened “emotional intelligence” — that is. love the sheer complexity of options. whose Omega Advisors remains one of So intense was Sperandeo’s newfound pas- the industry’s largest hedge-fund operations. despite having slogged through the bear market of 1969.000 books about they gave me the job of researching it. and has since witnessed many monumental Entirely self-taught. Vic “It all came from reading books. where he personally handled partners’ models.S. because markets are like bacteria: always sic 1993 book Methods of a Wall Street Master.000) and launched his firm. Sperandeo remain..” . ­options. and trial Bergeron’s chain restaurant.” Sperandeo re- nearly every facet of the financial markets. For that — and for numerous other feats of In April 1971. “So claims to have read more than 1. found a market mastery — we hereby raise a stiff mai tai backer (an acquaintance had just inherited to Trader Vic. futures. Over four Pershing after answering a classified newspaper decades. the son of and self-promoters. A assuming hero in an industry filled with icons native of Jackson Heights. he found better-paying grunt made markets. 2005) of besting the S&P 500. twice what the CEO of U. ing. But if you were and error. He has managed money for George Soros nancial experience principally by winning pots and Leon Cooperman. Queens. To fully appreciate Sperandeo’s skills. the terms of his compensation. executing big client trades for banks and trust a PM for Japanese bank Nomura.” at the time. sion that he talked his way into a job as an op- “What is most impressive is that despite tions trader at Filer Schmidt & Co. so this is very looking to mutate 72 percent. “Victor is a trader’s trader. Options. markets are like best to start with his dizzying trading streak of 18 consecutive positive years (through 1990). munis. it’s pedic memory of trading history but a height. he lost firm called Marsh. information has given him not only an encyclo. preferreds. Block & Lieber as a portfolio 15 percent again.” says Coop. He calls of the heavyweight Lehman partner. “Morris Natelson sold straddles. Sperandeo is an un­ industry changes. profitable ride on the crude wagon) His vast experience and insatiable hunger for bear markets.” Sperandeo says of his prowess. owned seats. where he his intelligence and talent. Even the most famous investing natural for me. so just as quickly he left to join a annual-gain streak. He was soon about learning new things. books. this look no further than “Trader Vic” Sperandeo. the only annual losses he ­realized that he needed to be the one dictating has registered in 42 years. traded client money. currencies and his specialty. A year seen it all during his career. Sperandeo.000 in commissions — more than $1. which looking to find the best trader in Dallas. he still gets excited later. Sperandeo got his start on Wall Street out Now 63. notably the rise of options. and in just his first six months gen- $300 million currently placed with Sperandeo’s erated $50. the newest member of the ­Trader $500. he doesn’t spook easily. new ways to trade.

wanted liquidity. “Try making a market in IBM busy working on his newest creation. All Rights Reserved. George Weiss  |  Weiss Associates August 12. more long-term view) didn’t mesh. He Barron’s. in an extensive darn good nonetheless. his “The difference between successful traders and ing spectrum while managing more than $1 bil- account swelled 300 percent that day. Foster Printing Service: 866-879-9144. cashed in on — the gence.” say the least. lesser-known “mini-crash” of October 1989. He provided it. “but because he keeps moving forward. remembering facilitating These days. “I had just turned bullish. naturally. issue of glamour blue-chips. MARTIN “BUZZY” SCHWARTZ  |  INDEPENDENT him. per se.” he says. but hit In late 1981. he was able to main- phone call from George Soros. “If you the technicals. © Doubledown media. As for the current commodities bubble John Henry  |  John W.000 score.” tative trading system based on patented models. a quanti- are T-bills and gold. then. “Winning and tions dealer in the world. because he had figured out that the market. 1982. the tem). “Speculators follow trends. Soros told me no thanks. but pretty MICHAEL STEINHARDT  |  STEINHARDT PARTNERS Roughly five years later. Yet the re- Weeden & Co.’ The ones who did well were the ones aged seasoning.traderdaily.” he says. The experience left him computerized.com. Volume flowed his way sperandeo shorted of a not-so-secret admirer.  Excerpted with permission from Trader Monthly. 300 percent. Program trading will exag- when it was trading in the $500s. Although he did quite well. he’s working at opposite ends of the trad- with a nearly instantaneous $250. Sperandeo attracted the attention six months. so I told make them.for a character in Ayn Rand’s Atlas Shrugged. 1 in to black monday. Henry & Co. “There banks of that time. October 16 — one trading session other traders. was down in ’69. his who gave him a chunk of Omega money to man- ­accustomed to premium-steep workout quotes. says.com. In 1998. for a short time.” is his middle name) and hired.” is a good chance the market has topped.” Matt Feshbach  |  Feshbach Brothers ing in those years. 27. ’73 and ’74. Soros.” he says. Sperandeo made a prediction: The ­handedly making markets alongside the biggest is totally about creating alpha. but “Vic is unique not only because he’s achieved he also was facilitating huge blocks of success throughout his career. needed such as those made via Sperandeo’s quant sys- blair hull  |  HULL TRADING COMPANY a short seller to hedge. to see things beyond the indicators. On the web at www. “It was nerve-wracking. “When I started. my one session prior losing. single. you were gone. 1987. to see re- seller who could thrive in bear markets — the t h e t r a d e r m o n t h ly h a l l o f fa m e versals or consistency of trends. He’s a good role stock market was in perilous territory. his own emotional intelligence. he has He enjoyed a 35 percent gain in 1990. his discretionary trading arm.” Throughout his four-decade career. which creates prior to Black Monday — Sperandeo backed up five made him money. Soros knew of of markets: “You use a lot of indicators to mea- Sper­andeo’s reputation as a prescient short sure the markets — as guides.” he says of trad. even if he had ­ ccount swelled a age. October 2008. the Dow lost 5 in oil. He’s also Sperandeo said. . during the early stages of the maintained his commitment to understanding a rough patch in 1991–’92 when he was bearish Reagan bull market. gerate the move to such a degree that the sell-off In 1979. Leon Cooperman.” He scoffs at artie reinhardt  |  REINHARDT & MERZ the money between December 1981 and the end the notion that traders are to blame for the spike JOE RITCHIE  |  Chicago RESEARCH AND TRADING of July 1982. Short- convinced — unlike the famous Turtle breeder rithms based on his systems. “should carry equal emotion. the man who called all those previous Andy Krieger  |  Northbridge Capital Management Hungarian gave the bearish Sperandeo a chunk crashes sees no end in sight: “A bull market in BILL LIPSCHUTZ  |  HATHERSAGE CAPITAL MANAGEMENT of assets and instructed him not to lose more crude will persist until the population demands Leo Melamed  |  Chicago Mercantile Exchange than 5 percent or he’d be fired. when he was not IQ but what I call ‘emotional intelli. try to understand the fundamentals along with Lewis Borsellino  |  Chicago Mercantile Exchange while Sperandeo was up each year. Sperandeo continued to trade options. and On Friday. by large allocations Larry Hite  |  Mint Investment Management would end up losing 33 percent in 1981. such IBM and XRX.marketingreprints.” he insists. at least in my experience.” he says. But you have to be open-minded JIMMY CAYNE  |  BEAR STEARNS couldn’t short. He trained 39 traders. lion: running disciplined quant models and science also paid off two years later. “You Tom Baldwin  |  Chicago Board of Trade Dow. Sperandeo ran reality instead of [Al] Gore gospel. Sperandeo still trades. but only Alpha Financial Technologies. STEVEN SCHONFELD  |  SCHONFELD GROUP ­Soros I ­wanted to give the allocation back to With crude at around $120 as of mid-August. it seems ED SEYKOTA  |  INDEPENDENT allocation. 1987. whose $1 billion Quantum Fund ­(inflated in part. in the end the two men’s styles (Cooperman typically takes a to write the option himself.” Cooperman i­ nterview in the September 21. Still three shy of his record. ing S&P 500 futures. after all. investible commodities algo- his words by taking a short Dow position. tain an even keel throughout — the triumph of became. www. Sperandeo began the day Richard Dennis — that traders can’t be trained. to model for aspiring traders.” The Dow hit a low on positive year — which will make 15 in a row. acquired Ragnar in 1977. they don’t JIM ROGERS  |  ROGERS INTERNATIONAL COMMODITIES INDEX ­percent. Sperandeo received a — to the extent it’s even possible — the nature as the market rallied. “I asked if I could run a long and his asset base nearing $2 billion. “The only thing I’d own now monster orders. the s&p 500.” firm was ranked No. With the Dow at 800. doing discretionary trading based on his prime- called — and.) who did not let ego and pride get in their way. 10 up. ’70. taught and ­seeded Partners. It on october 16. the largest OTC op. He stayed flat. (His pre- unsuccessful traders. spect between the two men remains palpable.” he says. Still. he had ­ clear that Trader Vic is due for yet another VICTOR SPERANDEO  |  alpha financial technologies plenty of long traders. yes. he founded Hugo Securities (Hugo He oversees two Dallas-based companies: EAM could be the steepest on record. some say. Simultaneously. and we were No.

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