Options disclosure: "Options involve risk and are not suitable for all investors as the special risks inherent to options trading may expose investors to potentially significant losses. Please read Characteristics and Risks of Standardized Options at tastytrade.com/disclosures before deciding to invest in options."
In this insightful conversation, the host sits down with Scott Sheridan, CEO of TastyTrade and co-founder of the revolutionary trading platform Thinkorswim, who shares his decades of experience navigating volatile markets and building successful financial technology companies.
Scott discusses his contrarian approach to current market trends, explaining why he remains skeptical of popular investments like cryptocurrency and gold while emphasizing the importance of options trading during periods of high volatility like we're experiencing now.
The interview explores Scott's entrepreneurial journey from floor trader at the Chicago Board Options Exchange to creating two major brokerage firms, focusing on how he built strong company cultures and the critical importance of timing, team building, and maintaining vision while staying flexible enough to pivot when necessary.
Scott and the host delve into practical investment strategies for uncertain times, with Scott advocating for consistent market participation through dollar-cost averaging and his current preference for selling puts in quality stocks during high-volatility periods.
Key Takeaways:
* Trade small and trade often - consistent market participation with manageable risk beats trying to hit home runs, especially for those just starting their investment journey
* Focus on what you can control and maintain strong risk management - whether in trading or business, calculate your risks and never invest more than you can afford to lose
* Build businesses and hire teams based on trust and complementary skills - successful partnerships require people you'd trust with your financial future, and company culture flows from authentic leadership rather than corporate buzzwords
Head over to https://provenpodcast.com/ to download your exclusive companion guide, designed to guide you step-by-step in implementing the strategies revealed in this episode.
KEY POINTS:
02:34 - From floor trader to tech pioneer: How Scott transitioned from trading at the Chicago Board Options Exchange to co-founding Thinkorswim, revolutionizing online trading by creating sophisticated platforms that retail investors could actually use.
05:35 - Why this market crash was different: Scott explains how the recent volatility was completely self-induced by political decisions, making it unlike previous crashes and creating unique opportunities for prepared traders.
06:09 - The young investor's advantage: Why people in their 20s and 30s need to take significant risks and stay engaged with volatile markets, since they have 40-year time horizons that virtually guarantee higher returns.
13:01 - The psychology of trading size: Scott's gambling wisdom about getting opponents to play for more than they're comfortable with, and how to know immediately if you're trading too big by your physical reaction.
35:00 - Selling flood insurance after the flood: Scott's current strategy of selling puts during high volatility periods, explaining how elevated option premiums create profit opportunities for patient investors.
39:40 - Building culture through trust: How Scott creates family-like company environments by challenging employees beyond their comfort zones while promising that any mistake can be fixed with time and money.
52:54 - The entrepreneur's regret insurance: Scott's passionate plea to anyone considering starting a business - the worst outcome is working for someone else again, but the regret of never trying lasts a lifetime.