The Outlier Trading Podcast Kris Abdelmessih: Using Options Volatility to Trade Smarter | The Outlier Podcast
Jul 30, 2025
Kris Abdelmessih, from Moontower AI, shares his expertise in using options volatility to enhance trading strategies. He discusses his pivotal career shift to independent trading, emphasizing the importance of humility and adaptability. Kris highlights how to measure market movements and navigate risk while managing options effectively. He also dives into the often-misunderstood concept of optionality, using real-world examples to illustrate its significance. Tune in for valuable insights on improving trading approaches and understanding market dynamics!
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Getting Run Over By Big Call Buyers
- Kris describes getting crushed in 2020–2021 when large buyers skewed calls and market makers were overwhelmed.
- That painful experience taught him how new coordinated buying patterns can break previously reliable edges.
Split Local Risk And Shock Risk
- Manage path risk by separating local (daily) risk and shock (tail) risk and sizing for both scenarios.
- Monitor gross exposures for shocks and nets for day-to-day, and set limits that protect business continuity.
Benchmark Trades To Speed Learning
- Shorten feedback loops by normalizing trade results to a benchmarked hedging policy (e.g., daily close hedges).
- Use vol-neutral or synthetic benchmarks to attribute skill versus exposure quickly before thousands of trades.