Show Notes

Professional Cryptocurrency Trading with Chris Kvamme of Presidio Trading

We explore the world of crypto trading, high-frequency trading and the incredible lengths traders go to gain an edge. 

From laying optical fiber all the way from Chicago to New York to running software on bare metal, we uncover the secrets of this opaque industry with Chris.

NOTE: All opinions expressed by podcast participants are solely their own opinion and do not reflect the opinion of their employers. This podcast is created for informational purposes only and should not be relied upon as a basis for investment decisions. Clients of firms related to podcast participants may maintain positions and securities discussed in this podcast. Positions and securities discussed in this podcast may not be available in certain locations. This podcast does not condone trading from restricted jurisdictions.

About Chris Kvamme
Chris is an avid hacker of both human and technological systems. For the last four years he's been working on algorithmic trading and is the head of Presidio Trading, a crypto currency trading firm.

EPISODE LINKS

TIMESTAMPS

[00:00:42] - Crypto trading with Chris in Texas.

[00:01:24] - Trading algorithms, servers, markets.

[00:01:54] - Addicted to market trading.

[00:02:27] - Impacted by FTX: Rough Year.

[00:03:02] - Trading FTX: Strange if not.

[00:03:56] - Tech prowess, but bad decisions.

[00:05:18] - Fast trading: latency matters.

[00:05:50] - "Trading for cents: What's His Name?"

[00:06:13] - Algorithmic Trading in Milliseconds.

[00:06:41] - Crypto vs. Traditional Market Latencies

[00:07:08] - Faster tech, not released publicly.

[00:08:27] - FPGAs for ultra-low latency trading.

[00:09:07] - Intra-exchange speed, inter-exchange latency.

[00:09:46] - Optical fiber from Chicago to NY.

[00:10:26] - Bore hole through mountain: $100M.

[00:11:49] - Secretive SEO money race.

[00:12:35] - Opaque, zero-sum knowledge sharing.

[00:13:44] - "Breaking into the black box."

[00:14:14] - Proving trading theories to HFT firm.

[00:15:06] - Find alpha, get hired.

[00:15:36] - Exploring bad habits in trading.

[00:16:05] - Breaking into funds: Many paths.

[00:16:43] - Making predictions, betting sizing.

[00:17:18] - Betting, Trading, Poker, Skillset.

[00:18:02] - Know code, understand crypto.

[00:18:36] - "Do it yourself crypto trading."

[00:20:02] - Quantitative long-only trading shop.

[00:20:20] - Maximizing upside, minimizing downside.

[00:20:58] - "Spidering cryptocurrencies for changes."

[00:21:33] - Data-driven trading life cycle.

[00:22:02] - Creating features for predictions.

[00:22:34] - Analyzing data differently for success.

[00:23:02] - Market data: key to success.

[00:23:32] - "Magic Spider Scrapes Exchanges for Math"

[00:24:00] - Human Intelligence Collection Analysis.

[00:24:19] - Sniffing for alpha opportunities.

[00:25:07] - Fundamental event risk assessment.

[00:25:37] - Quantitative and fundamental analysis.

[00:26:24] - Data-driven trading decisions.

[00:27:16] - Data collection through human ingenuity.

[00:27:58] - Making money, keeping score.

[00:28:53] - Competing in worldwide competition.

[00:29:31] - Smart engineers trading 24/7 globally.

[00:29:59] - Managing money with joy and responsibility.

[00:30:43] - "Bull market success in 2021."

[00:31:07] - Mom's incredible crypto return: "Almost unbelievable!"

[00:32:09] - Fastest to the exchange: Litecoin.

[00:32:36] - Cloud-based technology revolutionized.

[00:33:10] - "Shutdown of FDX: Slow, Painful Process"

[00:33:42] - Late withdrawals, one successful.

[00:34:11] - 24-hour crisis: freezing withdrawals, 3AM ideas.

[00:34:58] - Wild trading during FTX withdrawals shutdown

[00:35:48] - "Silicon Valley Bank: flashback to childhood"

[00:36:26] - Money insured up to limit.

[00:37:02] - "Kid not smart enough for risk."

[00:37:24] - Hope fools us all.

[00:37:42] - Embrace fear to be best self.

[00:38:11] - Raising money requires account management.

[00:38:41] - Experienced, insured, no panic.

[00:39:07] - "Hundreds of billions traded daily."

[00:39:41] - "Risk and Reward: Alpha FTX"

[00:40:13] - Sweeping funds across FDIC limits.

[00:40:47] - "Don't have enough funds for collapse."

[00:41:14] - FDIC not covering crypto exchange.

[00:42:16] - No fraud, active trading only.

[00:43:03] - Theft, fraud, trading, hustle.

[00:43:38] - Cryptocurrency collapse: Lunatara.

[00:44:16] - Algorithmically flawed Stablecoin disaster.

[00:44:50] - Crypto: Phenomenal Asymmetric Returns.

[00:45:14] - Competing in Crypto Markets: Risky!

[00:45:59] - Competing for crypto alpha.

[00:46:28] - Gaining alpha from lack of regulation.

[00:47:26] - Long-term day trading without rules.

[00:47:45] - Crypto: High Alpha, High Risk.

[00:48:24] - Increased scrutiny leads to security.

[00:48:49] - Trading corn and wheat: agnostic.

[00:49:34] - Trading crypto, running startup firm.

[00:50:11] - Explored crypto, found Ethereum.

[00:50:44] - "VC, trading, tech, Palo Alto bubble"

[00:51:51] - "Researching crypto VCs and trading firms"

[00:52:37] - "Investor interviews in their prime."

[00:53:22] - "Math disaster, but saved by replay."

[00:53:46] - "VC interview: mental math test"

[00:54:28] - Secrecy of Trading Revealed in Alamo

[00:55:09] - Secretive millionaires in strip mall.

[00:55:45] - Mysterious stranger with games.

[00:56:09] - Eclectic interview: Fermi Paradox to CPU

[00:56:56] - Catching big fish: from novice to mentor

[00:57:41] - Exploring new markets for alpha.

[00:58:18] - Exploring crypto and reinforcement learning.

[00:58:46] - Exploring to learn and exploit.

[00:59:15] - Explore, exploit, repeat.

[00:59:53] - Explore new opportunities, test traction.

[01:00:26] - Life to crypto trader to CEO.

[01:01:04] - Raise money for growth needed.

[01:01:42] - Direct route to success without reliance.

[01:02:07] - Building a company, smarter people.

[01:02:50] - Leaving trading firm to start own firm.

[01:03:55] - "Make it easier: knowledge is key."

[01:04:10] - Form LLC, trade SMA accounts.

[01:04:39] - Lessons learned, bear market confusion.

[01:05:24] - "Inflation stops, retail investors uncertain."

[01:06:06] - Bitcoin is the new dot com.

[01:06:59] - Government entering crypto for control.

[01:07:35] - Invented algorithms, personal bias.

[01:08:26] - Investing in digital gold (Bitcoin).

[01:09:22] - Crypto focused long-term macro cycles.

[01:09:56] - Define success in bear markets.

[01:10:17] - "Lucky to survive, double down."

[01:10:55] - Time to attack and build.

[01:11:30] - "Stay steady in down markets."

[01:12:02] - "Survival of the fittest investing."

[01:12:35] - Stay in market for gains.

[01:13:12] - Gain through reflection and discussion.

[01:13:31] - Long-term prediction for success.

[01:14:23] - "Withstand cycles for success."

[01:15:20] - High returns on Bitcoin investment.

 

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