“We’re not in the business of predicting what the market’s going to do, right? We just need to understand what the market does and how to exploit that.” – 02:08
David Chau, Founder & CIO of SPX MGMT, joins Remy Blaire at the New York Stock Exchange to discuss his unique approach as a quant trader, focusing on a delta-neutral strategy that allows him to navigate the market without relying on whether it will trend upward or downward. He explains that the market is efficient, and traders should concentrate on exploiting this efficiency rather than attempting to predict market movements.
The conversation shifts to the options market, where David emphasizes the importance of SPX derivatives as indicators of market sentiment. He breaks down the concept of expected moves in the options market and addresses common misconceptions surrounding options trading. David clarifies that a higher accuracy rate does not necessarily guarantee profitability, explaining that even with a 99% accuracy rate, traders can still incur losses due to negative expectancy rates.
As they explore market behavior and sentiment, David stresses the importance of not getting caught up in the constantly changing landscape of market news. Instead, he advocates for focusing on the data and expected moves provided by the market. He reassures listeners that his strategy does not require forecasting future market conditions, as the market itself will indicate the direction of movement.