Ruben Zagagi has 15+ years experience developing proprietary models for trading futures and options on futures.Registered with INTEX as an associated person since June 2, 2008 and as a principal since May 29, 2008.
Ruben Zagagi has 15+ years experience developing proprietary models for trading futures and options on futures.Registered with INTEX as an associated person since June 2, 2008 and as a principal since May 29, 2008.M.B.A., Finance and Accounting, University of Tennessee, Knoxville, TN. Graduate Program (MA equivalent), Accounting, Tel Aviv University, Tel Aviv, Israel. B.A., Accounting and Economics, Tel Aviv University, Tel Aviv, Israel.
Ilan: How did you first get involved in trading?
Ruben: Actually, I have had the passion for trading for a very long time. I started trading when I was a teenager. I took my summer work money and started trading equities. The market was simply fascinating.
Ilan: What is your trading methodology?
Ruben: I do option credit spreads most of the time. Depending on market conditions, I can go into debit spreads as well. Those are rare.
Ilan: What is your day-to-day focus these days?
Ruben:My day to day focus is on maintaining a view on the market, watching out for early signs of impending market moves, both technical, fundamental and geopolitical.
Ilan: How do you filter out the noise and figure out what’s important?
Ruben:That comes with years of experience, watching the market, getting through various market conditions and changing behavior. There are many factors that go into noise vs. real moves.
Ilan: Did you have a method for controlling a risk?
Ruben:I have stops. Where the stops are placed depends on several factors, including technical and an overall view of the market.
Ilan: Did you have any goals when you set out?
Ruben:My goals are to generate moderate returns with minimal drawdowns. While drawdowns are inevitable, I go with the saying ‘pigs get slaughtered.’ So I do not look for extraordinarily high returns, knowing that much higher risk comes along with higher returns. I view my job primarily as managing risk.
Ilan: What is 1 thing traders can do today to start getting better results?
Ruben:I’m sure you have heard this many times. Discipline is key. The set of rules that you set as a trader should not be changed at times of distress. That isn’t a time when you can set rules in a rational manner.
Ilan: What is the role of commodity futures market and why do we need them?
Ruben:One function of commodity futures markets is to trade assets that are outside of equities. For example, in the equity market you can trade oil companies, but if you want to trade crude oil directly, the futures markets are there to facilitate. Another function for most investors is simply diversification. The stock market has become so efficient that stocks move together. It has become highly correlated. Commodities markets can offer an uncorrelated return that reduces overall risk and volatility for your portfolio as a whole.
Ilan: Are there any traders you look up to?
Ruben:Ed Padon. He managed a $200M+ fund up until the 2008 crash. He managed 1 10% drawdown in 2008 when everyone else was getting crushed. His conservative management in trading futures was an inspiration.
Ilan: Do you have any concerned about algorithm grading & high frequency?
Ruben:Yes, my main concern with algorithm trading is that the market changes. An algorithm will work beautifully until the market changes, then it fails. From my experience, by the time the algorithm shows good results and people start putting money into it, then it often fails. The market changed its pattern by then. As far as high frequency trading, it worked well when only a few were playing against the slow players. Now that many frequency trading players are out there, they are playing one another, which lessens the effectiveness of the strategy.
Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time.