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A great opportunity to gain insights from an Alameda Quantitative Trader, on how he got to where he is and a glimpse into his minds when he regards the crypto markets and its idiosyncrasies. I had to start this conversation on the fact that Sam Trabucco is a crossword puzzle builder for the New York Time’s! How cool is that!? Not only that, but he has the 8th highest scrabble average of all NYT crossword constructors. Intelligent seems to be an understatement at this point.

After questioning him on this front, we moved onto the world of math and strategy games. I wanted to know how he had gotten introduced to this world and why it called to him. Trabucco walked me through growing up on math competitions (funny enough he had met Sam Bankman in highschool through one) and how his love for fast thinking strategy games shaped him into who he is today. We also touch on the difference between deep thinking versus quick thinking in math and the trading world.

Next up is university days and an internship at SIG where he played a lot of poker and realized his confidence in himself was valid. After college Trabucco went full time to SIG and worked on their structured products trading desk, followed by their sports betting desk, at his time there, he learned a variety of skills, the strongest being the capacity to think sharply during crises.

After an 18 month interlude, Trabucco joined Sam at Alameda, where he quickly carved a niche for himself by showing his calm and proactive approach during critical moments. He then goes on to explain risk vs expected value and how to feed off of stressful situations. For this explanation the perfect example was used March 12th, and how that day was for Alameda and him in particular.

Trabucco broke down some of the notable idiosyncrasies he has witnessed and been part of trading in the crypto market. This section has some useful tips for dealing with the unexpected, especially when a lot of money is on the line. It’s notable to see how everyone in the space is learning from others mistakes, and there’s a continuous positive advancement overall.

The S&P 500 and BTC correlation seen from March 12th up until recently was a topic debate, and drove much of the trading during that period. Trabucco breaks down why he thinks it happens and what Alameda did as a trading firm to reconcile with it. This topic ties into liquidations, one of the, if not the most significant driving force behind price movements in crypto at the moment. We winded down the podcast with two more subjects; DeFI and what is next on Trabuccos roadmap. In the DeFI space we discussed Compound, cUSDT, and liquidity farming. We parted on some thoughts of what the future holds for cryptocurrency and the problem with marrying assumptions.

00:00 – 01:21 Introduction

01:21 – 03:22 Crossword wizard

03:22 – 08:22 The world of math and strategy games

08:22 - 13:15 Quant internships and NYT crossword construction

13:15 – 16:05 The path into crypto trading

16:05 – 18:56 What math and best practices should quants learn?

18:56 – 22:35 Carving a Niche in Alameda and thinking quick in situations of crisis

22:35 – 25:11 Risk vs expected value (feeding off of stressful situations)

25:11 – 28:00 March 12th (aka DA CRASHHH) and how to become okay with risk

28:00 – 32:12 Idiosyncrasies in crypto, how to deal with them and how they have been dealt with (BCH fork)

32:12 – 33:24 The entire space is learning from others mistakes

34:24 – 37:33 S&P 500 and BTC correlation

37:33 – 40:37 Liquidations, liquidations, liquidations

40:37 – 43:10 Compound, cUSDT and the DeFI craze

43:10 – 45:40 Assumptions and what’s next on Trabucco’s roadmap