Chat With Traders 285 · Greg Magadini - Cashing in Through Exploiting Volatility
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Aug 6, 2024 
Greg Magadini, a former proprietary trader who transformed $50,000 into $1.3 million, discusses his dynamic journey through trading. He shares insights on volatility trading in the crypto market, particularly in the wake of the FTX crisis, and the unique challenges compared to traditional equities. Greg highlights innovative strategies that identify market inefficiencies while emphasizing emotional resilience in trading. He also opens up about founding a crypto options analytics company and navigating the complexities of trading with both personal and external capital.
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Volatility Premium Dynamics Cycle
- Bull markets in crypto see very high option premiums and call skew due to buying euphoria, while bear markets flip put skew and futures basis.
- These market cycles create dynamic trading opportunities on both long and short volatility sides.
Solana Perpetual Discount Trade
- During the FTX crisis, Solana perpetual futures traded at a 30% discount to spot, allowing buying the discounted perpetual and earning funding while waiting for convergence.
- This trade offered massive annualized yield simply by holding and benefiting from price convergence and funding payments.
Wall Street Impact on Crypto Markets
- High costs and limited capital infrastructure in crypto prevent Wall Street arbitrage of futures basis and volatility premia.
- New spot ETFs enable traditional finance to hedge and will eventually reduce crypto options variance risk premiums.