Prop & Indie Traders

August 26, 2005 20058 11:20 pm | In Trading |

As the list is very long, please use the Search (Ctrl + F) button to look for what you want.

Thomas Peterffy

City: Greenwich, Connecticut
Firm: Interactive Brokers Group
Age: 60

Chairman of the futures and options market makers, Peterffy oversses IBG's ground-breaking algorithmic models. While machines do all of the actual trading, Peterffy and his team actively feed and monitor them. An IBG spokeswoman insists Peterffy no longer trades, but a source close to the firm says, "At an age when he could be taking it easy, he's still very much hands-on with that whole operation." Peterffy is a majority owner in the privately held firm, which brought home estimated profits of $250 million last year.
Estimated income: $75 - $100 million
———————————————————————–
John Devaney

City: Key Biscayne, Florida
Firm: United Capital Markets
Age: 34

What He Trades: Down in south Florida, John Devaney is taking on Wall Street — on his own terms. A secondary market maker specializing in the sale and structuring of asset-backed securities, Devaney and his firm, United Capital Markets, pick up paper other houses wouldn't touch with a very, very long pole — and they make a killing. But he's not about to let the Street catch up. "There's still plenty of opportunity out there," he insists. "Generally, by the time value has stripped from the sector, we're already into the next one." Some currently hot markets for him include pooled aircraft leases and CDOs.

How He Trades: Knowledge is the key to Devaney's strategy. His firm doesn't just buy any old junk, instead researching the underlying risk. "We're willing to take on the principal risk in our deals, as opposed to merely lining up buyers and sellers," he says. "When we buy distressed bonds, we're buying at levels where we'd be comfortable holding them to maturity if necessary." Many view him as a maverick, though Devaney balks at the term. "To me, the word maverick implies reckless risk-taking. We view ourselves as educated risk-takers. Our opinions of credit are informed."

How He Got Started: Talk about taking risks: In 1999, Devaney quit his job on the mortgage-trading desk at Capital International, took $500,000 of his own money and, with no outside investors, decided to open his firm. He was 28 years old — and the sole employee.

When He's Not Trading: Eager to attract attention, Devaney has hired everyone from Earth Wind & Fire to the Counting Crows for industry conferences. "Compared to many of our competitors in the industry, the money we spend on marketing and advertising is a drop in the bucket," he says with a shrug. "Focusing our dollars on one or two big events each year has been a way for a firm like ours to make a big splash. We like to do them right."

On the philanthropic side, he backs a local community-reinvestment program and has headed the Key Biscayne Community Foundation. He also owns pieces of a real-estate investment company, a yacht charter operation and an aviation holding company.

Words to Live By: "We've had to be creative to keep our edge."
Estimated income: $40 - $50 million
———————————————————————–
Joe Lewis

City: Lyford Cay, Bahamas
Firm: Tavistock Group
Age: 68

A legenday currency trader who has a hand in various investment ventures, the British-born Lewis caused a stir last year when he joined a hostile bid for U.K. homebuilder Countryside Properties. A golf fanatic who once paid $1 million at a charity auction for a round with Tiger Woods, Lewis's net worth is an estimated $5 billion. That's not bad for a lad from London's East End who left school at age 15. His Tavistock Cup tournament in Orlando, Florida, at the Tavistock-owned Lake Nona and Iselworth clubs, always draws a slew of PGA and European-tour talent.
Estimated income: $40- $50 million
———————————————————————–
Nicholas Roditi

City: London
Firm: Plantation and General Investments
Age: 60

A former Soros traders, Roditi took the Quantum leap in 2000 along with Stanley Druckenmiller after the fund suffered severe losses by failing to effectively gauage the tech-stock surge. Roditi, a macro trader and notorious recluse, has been quietly trading his own money and cleaning up. Born in Zimbabwe, he owns a 68 percent stake in Plantation and General Investments, an African group.
Estimated income: $30 - $40 million
———————————————————————–
Paul Rotter

City: Zug, Switzerland
Firm: Rotter Invest AG
Age: 33

It was quite a year for Rotter, the Czech native who is regarded as one of the most successful individual traders on the Eurex. He specializes in German bond futures and is responsible for some 10 percent of the Bund market.

Early last year, some Eurex prop traders started noticing suspicious price movements in Schatz futures; they blamed Rotter, branding him "The Flipper." (Rotter says it's just sour grapes about his size and acumen.) He used to spend up to 11 hours a day trading but says he cut down last year.
Estimated income: $30 - $40 million
———————————————————————–

Michael Palumbo

City: Chicago
Firm: Third Millennium
Age: 38

What He Trades: Palumbo’s foremost hunting ground is in the equity-options market, and last year he made major bank going long oil stocks and short volatility. "We started going long crude-oil stocks at the beginning of 2004, based on the feeling that the level of demand in places like China and India was underestimated," he explains. His long positions in BP, Exxon and Halliburton options also panned out nicely.

How He Trades: Don't ever expect to find Palumbo thumbing through the morning papers. "I rarely read the Wall Street Journal," he says. "I get my ideas about the market from talking to people." Says John Niemann, a CBOE floor broker and friend, "Mike is a really smart trader — even at the beginning of his career, he was good."

Because Palumbo was a once a credit analyst, he knows his way around a balance sheet. But it's his understanding of macroeconomics — and Third Millennium's role as a market maker — that most helps him sniff out winning trends. "I pay close attention to what is coming across our desk," Palumbo says. "We might not be in on the trade, but it's important to know what people are doing."

How He Got Started: Palumbo began his trading career as a clerk on the floor of the CBOE for Susquehanna Financial Group in 1993. Within six months, he had graduated to the ranks of market maker. He soon felt he could make it on his own.

"I could have stayed and made a pretty good living. But I wanted to go out on my own and see what I could do," he says. "I didn't feel like Susquehanna was giving me fair compensation." He split and formed Third Millennium. Starting in the Kmart pit in 1996 with $250,000, the firm quickly moved upstairs. There were rough spots at first — such as the summer of 1998, when Russia defaulted and the Dow tanked — but the last few years have been sensational.

When He's Not Trading: Growing up, Palumbo mastered poker and blackjack; he knew how to crunch numbers. These days, when he jaunts to the Palms in Las Vegas, he prefers to unwind with craps.

But he doesn't have to go to Vegas to be treated right — he's a partner in two swank nightspots in Chicago. "It just made sense for the lifestyle I have," he says. "I wanted to make sure I could always get the best table." He also owns a 125-foot power yacht that spends its winters moored in the Caribbean and its summers on Lake Michigan.

Words to Live By: "Perseverance."
Estimated income: $20 - $25 million
———————————————————————–
J.P. MaManus

City: Geneva, Switzerland
Firm: Cubic Expressions
Age: 53

Known as the Sundance Kid, McManus is a successful, reclusive, high-rolling foreign-exchange traders and financier. Born in Ireland, he resides in Geneva for tax purposes and is reputed to have an army of foreign-exchange traders working for him. He also has plenty of other interests, including horses and other forms of gambling (he made his first fortune as a bookmaker). In the U.K., McManus is best known for his stake in the Manchester United soccer club. He's also part of the Joe Lewis's massive forex syndicate.
Estimated income: $20 - $25 million
———————————————————————–
Christian Schaffer

City: Munich
Firm: First Futures
Age: 37

Among the largest traders on the Eurex, Schaffer is the managing director of First Futures, a prop-trading firm with eight employees, and member of the Eurex Deutschland Exchange Council. He trades mainly Bund and EuroStoxx futures. He also recently launched his own managed-futures fund, SASCAM Global.
Estimated income: $20 - $25 million
———————————————————————–
Bob Bright

City: Las Vegas
Firm: Bright Trading
Age: 65

A senior statesman among prop traders, Bright still lights it up. The NYSE-listed equities market has always been his sandbox (he dislikes Nasdaq market makers), though he dabbles in futures an doptions, mostly equity indices. Lately, he has been employing a pairs-trading strategy. "He's thrilled over the NYSE merging with ArcaEx – it's a big win for prop trading," says his brother, Don. When he's not trading, Bright scours the Strip for a baccarat table from which he hasn't been banned. He also owns Bugsy Siegel's 1933 Packard limousine.
Estimated income: $15 - $20 million
———————————————————————–
Dan Zanger

City: Miami
Firm: Chartpattern.com
Age: 52

What He Trades: No commodities, currency plays or black-box intelligence for this self-made prop legend. Instead, he trades mostly Nasdaq stocks. On the surface, Zanger is a purist, using chart patterns and more chart patterns to find his prey.

How He Trades: What is he looking for? "Frisky stocks that are starting to perk," he says. He takes a high-intensity "180-mph, inches from the wall" margined 2-to-1 approach to trading. In early 1998, Internet stocks exploded, and as they cooled in late 1999, biotechs took off. They ran for six months; then fiber-optic stocks took over in 2000 and cooked until Nortel preannounced a shortfall in earnings.

Zanger has found that such groups run for around 6 to 18 months, and then it's time to move on. "You have to know what's hot and follow that stock or group. I find out who the winners are and stick with them, moving in and out until they begin to fizzle," he says. On a typical trading day, you'll find him glued to his computer screens, following anywhere from 40 to 60 stocks, watching his "frisky buddies" for breakouts or breakdowns.

How He Got Started: After finishing high school in 1971, Zanger was a ski bum for four years, then got addicted to Charting the Market, a little-watched television show on channel 22 in Los Angeles, on which the host charted pennants, flags, cups and handles and other patterns.

In 1989, Zanger took a course from Bill O'Neil and would spend three hours on weekdays and 15 hours on weekends looking for chart patterns in his chart books; he still applies O'Neil's signature "Canslim" formula to this day.

In the early '90s, he had correctly identified rallies but got killed on corrections. By 1996, he had learned to recognize market tops; he accurately spotted a bearish reversal in the oil index in 1997, which he calls the turning point in his trading career. Taking what was left of his trading capital — all of $10,775 — he made $18 million in 18 months. In under two years, this stake had grown to an incredible $42 million.

When He's Not Trading: "Anyone who has worked in the construction business, like I did for 25 years, knows what it's like to work long, hard hours for little income. When the market is open, I have to be there. It is my passion and one of the loves of my life."

Zanger has homes in Miami Beach and Los Angeles, and he recently bought a new 88-foot yacht that will be equipped with a four-foot satellite dome that will allow him to trade from anywhere in the world. Zanger boasts an enormous collection of California cult wines and is also an avid collector of art.

Words To Live By: "Price, chart patterns and volume."
Estimated income: $10 - $15 million
———————————————————————–
Greg Beard

City: Chicago
Firm: TND
Age: 44

Last year, Beard made the move from pit to screen, giving up his former company, Beard Trading, for the screen-oriented TND. He currently trades interest-rate instruments. His major side pursuit, meanwhile, is buying and selling home on Lake Geneva.
Estimated income: $10 - $15 million
———————————————————————–
David "Tiger" Williams

City: Stamford, Connecticut
Firm: Williams Trading
Age: 43

One of the more amiable figures on Wall Street, Williams is a former trader at Tiger Management (the Yale hockey star's "Tiger" nickname pre-dated his time at Julian Robertson's famous fund). The eight-year-old Williams Trading, of which Williams is the founder and sole managing partner, is a desk-for-hire for hedge funds keen to outsource their execution needs.

An avid swimmer, runner and cyclist (he has completed an Iron Man triathlon), Williams is a major sponsor of the U.S. Postal Services cycling team and counts Lance Armstrong as a friend. His Tiger Foundation supports a range of charities.
Estimated income: $10 - $15 million

George Soros

The godfather of funds handed over control of Soros Fund Management to his sons last year to focus more fully on his philanthropic and political activities.
Estimated Income: $200–$250 million
———————————————————————–
Dan Och

Och is still very much involved in the operations of Och-Ziff, but Street sources assure us that he no longer actively trades.
Estimated Income: $100–$150 million
———————————————————————–
Ken Griffin

He hasn’t been near the trading floor in years. Regardless, his black-box Chicago hedge fund, Citadel Investment Group, had a great year and is doing more market making.
Estimated Income: $75–$100 million
———————————————————————–
Michael Gordon and John Angelo

Once two of the toughest arbitrage traders on the Street, Gordon and Angelo have built a top financial powerhouse — but they’re no longer trading.
Estimated Income: $75–$100 million each

Other Categories:

- Top Prop & Indie Traders
- Top Commodity & Pit Traders
- Top Wall Street & Bank Traders
- Top Hedge Fund Traders