Larry Benedict recently launched Opportunistic Trader, an interactive community to help traders become more informed and more consistent. We talked with him about getting started in trading. In addition, Larry is an expert in options, so with the strong rise in options trading across the futures industry and the big move that we at Trading Technologies have made into options trading over the past year, we asked him about the options space.
What inspired you to start Opportunistic Trader, and what differentiates you from other trading communities?
Larry: I purchased the domain for The Opportunistic Trader in 2012, but I never actually started it until a few months ago. If you think about it, in the past 10 years, equity markets have not had a down year. These so-called experts have not seen a real down move, and they are providing education with misleading advertisements and so on. Trading is very difficult; you need to put in hard work, research and dedication to succeed long term.
I have been trading for over 30 years, and I have other traders on my team with a longer trading career than me. More than anything, my team is filled with traders and analysts covering every asset class who are market professionals first and educators second. We have hosted great webinars recently on option expiration strategies and trading volatility that have gone very, very well, and they are like second nature to me, so it really does not feel like work.
Trader education seems to be a growing field. What is the driving force behind that?
Larry: I think just like most fields, with the explosion of smartphones, tablets and apps, people can connect with each other much more intimately like never before searching for information and education. Whether it be coding, cooking or trading, the internet allows everyone access like never before. Trading has always been a field that people of all levels seek greater education to allow them to increase profits and compete with Wall Street.
What advice would you provide to someone who wants to start a trading career today?
Larry: Get as much education in the markets as possible. Try to join a team with experience that has traded for more than 10 years and weathered many different market environments. Do as much research as you can on the markets. These days online, there are so many amazing tools for research, and it is important to know as much about a stock or commodity you want to focus on as possible. You need to know correlations, when options expire and market seasonality, to name a few. All of these are important to compete in the art of trading.
What is your high-level view of the markets today?
Larry: As traders, we prefer these sorts of markets where each day there are multiple trading opportunities. We do believe that volatility will remain elevated into year end and in 2019. At The Opportunistic Trader, we don’t think this was spurred solely by higher rates, but due to a number of factors such as the higher dollar, global central bank tightening, increased global trade tensions, an expected shift in U.S. leadership in the midterm elections (the House shifting to the left) and a slowing global economy partially due to U.S. trade. Prior to the October declines, global equity markets and emerging markets were already having a bad year, and money was pouring into U.S. markets for safety, which is always dangerous. Options prices have moved higher with volatility, which always creates more opportunity to utilize spreads and hedges to express directional views.
TT made a strong push into the options space last year. Across the futures industry over the years, we’ve seen volume for options growing steadily at a greater pace than volume in the underlying futures. To what do you attribute the shift to options?
Larry: I think probably due to increased leverage that options allow. You don’t need as much capital but can gain larger exposure, and options allow you to be very directional.
The increase in volume on options can also be attributed to better technology. Tools for options analytics, monitoring the options market and creating strategies have been lacking—or problematic—in trading platforms. TT has clearly taken a direct approach in solving these problems and has created more opportunity for traders to get involved with and profit in options trading.