Noel Smith – Always Have Risk Measurements in Place

<p><strong>BIO: </strong>Noel Smith is the Chief Investment Officer of Convex Asset Management and the Head of Options Trading at Tanius Technology.&nbsp;</p><p><strong>STORY:</strong> Noel and his partner invested in a stock whose price kept falling. Every time the price would fall, Goldman Sachs would come in and buy like 50,000 out of the money calls. This made the partners hold onto the stock, eventually riding it to zero.</p><p><strong>LEARNING:</strong> Have risk measurements in place that you know you will not break. Have some percentage that you're willing to lose.</p><h2 class="ql-align-center">“Learning about options and how they affect the marketplace is much more important than you think."</h2><p class="ql-align-center">Noel Smith</p><p><br></p><h2>Guest profile</h2><p><a href="https://www.linkedin.com/in/noel-smith-45070634/" rel="noopener noreferrer" target="_blank"><strong>Noel Smith</strong></a> is the Chief Investment Officer of <a href="https://www.convexam.com/" rel="noopener noreferrer" target="_blank">Convex Asset Management</a> and the Head of Options Trading at <a href="https://www.tanius.com/" rel="noopener noreferrer" target="_blank">Tanius Technology</a>.&nbsp;&nbsp;</p><p>A member of the CME, CBOT, and CBOE, Noel has over 25 years of experience trading volatility, market making, and managing risk.&nbsp;&nbsp;</p><p>Noel was previously the CIO and Portfolio Manager of two separate Chicago-based proprietary derivatives trading firms. Additionally, he was the seed investor who financed the launch of global high-frequency trading firm GETCO LLC (KCG/Virtu), which grew to account for 20%+ of trading volume in the U.S.</p><p><br></p><h2>Worst investment ever</h2><p>Noel and his partner had a position in Enron, the ninth largest market cap company at the time. Enron started to lose money. Each time the stock would go down 10%, Goldman Sachs would come in and buy like 50,000 out of the money calls. Such stunts would convince people, Noel included, to hold onto the stock. And so the partners kep