Victor Sperandeo

Victor Sperandeo
Born	(1945-03-16) March 16, 1945 Queens, New York, USA
Occupation	Trader, index developer, financial commentator
Website	http://www.victorsperandeo.com

Victor Sperandeo, known as “Trader Vic”, is a US trader, index developer, and financial commentator based in Grapevine, Texas, USA. He serves as the President and CEO of Alpha Financial Technologies, LLC (AFT), is a founding partner of EAM Partners L.P., and serves as the President and CEO of its general partner, EAM Corporation. He has over 45 years’ Wall Street experience trading both independently and for notable investors such as George Soros and Leon Cooperman.

Sperandeo is an expert in commodities, particularly in the energy and metals sectors. His market crash prediction during the September 1987 Barron’s interview earned him recognition.

In recent years, Sperandeo has become regarded for his futures market trading expertise and for developing futures-based indexes and trend-following strategies. These include both actively managed strategies and rules-based algorithmic quantitative models designed with the aim of delivering consistent returns with minimal volatility over long-term periods. In addition, Sperandeo on behalf of the EAM Group of Companies manages several accounts and commodity pools for entities such as global investment banks HSBC, Nomura, and RBS, among others.

1968–2000

Sperandeo, born in 1945, began his trading career as an options trader in January 1968 when he joined Filer Schmidt & Co., a stock options dealer, where he traded over-the-counter securities options. In March 1970, he moved to U.S. Options, where he continued as a securities option trader for bank and trust company clients.

Sperandeo became a portfolio manager for Marsh, Block & Lieber in September 1970 but soon left in order to launch Ragnar Option Corporation in April 1971. In addition to making a market for over-the-counter securities options, Ragnar also wrote options tailor-made to customer specifications, and, for a short time, Ragnar became the largest OTC securities options dealer in the world.

Ragnar acquired several exchange memberships on the Chicago Board Options Exchange soon after its founding in 1973, pursuant to which Gary Lahey, who would later become Chairman of the Executive Committee of CBOE, began floor trading. Sperandeo served as Ragnar’s President from its inception until February 1977, when its operations were merged into Weeden & Co. Sperandeo continued to trade options at Weeden, where he also became a block trader in so-called ‘glamor’ stocks, holding the position of Vice President until March 1978, when Weeden ceased operations.

Sperandeo then began to manage a proprietary trading account and several private client accounts for Interstate Securities, trading in securities and securities options until December 1986. Concurrently, in February 1979, Sperandeo founded Hugo Securities Co. Inc., where he taught and seeded other traders, building a business as market maker and specialist in securities options and trading futures. In the process, Hugo Securities acquired a number of exchange seats on the Chicago Mercantile Exchange, the American Stock Exchange, the Pacific Stock Exchange, the Philadelphia Stock Exchange and the New York Futures Exchange.

Concurrent with his tenure at Hugo Securities, during the bearish period from December 1981 until July 1982, Sperandeo traded a short portfolio for George Soros’ Quantum Fund. In addition, he served as principal and associated person for commodity pool operators and commodity trading advisors. Sperandeo himself was a registered commodity pool operator from February 1984 until March 1987. Furthermore, Sperandeo operated Victory Partners from June 1983 until September 1986, which was a hedge fund trading mainly options on security indexes. Subsequently, in October 1988, Sperandeo founded Rand Management Corporation, an investment adviser that was registered with the Securities and Exchange Commission.

Sperandeo sold the securities-related business operations of Hugo Securities Co. Inc. in May 1989. However, Sperandeo continued to trade futures. He was a registered commodity trading advisor from May 1989 until August 1993. In addition, from August 1993 until October 1994, Sperandeo conducted research that eventually would lead to the creation of the Diversified Trends Indicator. Furthermore, from October 1989 to January 2004, Sperandeo was a registered principal and associated person of Hugo Securities, now a commodity pool operator and commodity trading advisor.

During this period, Sperandeo was registered as an associated person of Rodman & Renshaw Inc., a futures commission merchant, from October 1994 to December 1995, serving as a consultant and futures expert. Sperandeo was also Managing Member, registered principal and an associated person of Trader Vic Investments LLC, a commodity pool operator and commodity trading advisor, from May 1996 until November 2001.

2000 to present

Sperandeo served as president and CEO of Alpha Financial Technologies, LLC (AFT) and EAM Partners L.P. (EAM) since their formation in 2000 and 2001, respectively.

AFT is a financial engineering firm focused on the research and development of “white box” futures-based indices created by Victor Sperandeo such as:

• Diversified Trends Indicator (DTI), a long/short commodity and financial futures index, which launched in 2004
• Commodity Trends Indicator (CTI), a long/short commodity futures index, which launched in 2004 as a sub-index of the DTI
• Financial Trends Indicator (FTI), a long/short currency and financial futures index, which launched in 2004 as a sub-index of the DTI
• FX Trends Index (FXTI) - a long/short currency futures index, which launched in 2010.
• Global Equity Rotator Index (GERI)- a long-only global equity futures index that selects on an annual basis futures exposure to the 5 most attractive indexes among a non-static pool of 14 equity indexes.

The DTI, CTI and FTI were licensed to Standard & Poor’s from November 14, 2002 through November 14, 2009 and known as the S&P Diversified Trends Indicator, S&P Commodity Trends Indicator and S&P Financial Trends Indicator during such time period. Effective as of November 15, 2009, AFT has commenced licensing its indexes directly to product developers/providers who in-turn structure and sell investment products to both institutions and retail investors.

In addition to its financial systems, an important aspect of AFT’s value lies in its patents. AFT has received three patents in the U.S., two in the Bahamas and one in Australia, and has several patents pending on financial products using long/short indicators or indexes in conjunction with leverage, which seek to add alpha while simultaneously reducing risk.

AFT has created an alliance of issuers of products linked to its indexes which include, among others: Merrill Lynch, HSBC, Nomura, Credit Suisse, UBS, Macquarie Bank, Guggenheim Investments (formerly Rydex|SGI) and WisdomTree.

EAM develops methodologies that are available to the financial and institutional community globally. EAM itself does not provide portfolio management services. Rather, EAM serves as the general partner of advisory subsidiaries that, in turn, provide portfolio management services for large institutions and certain other qualified investors.

Reputation

• Author of three books detailing his philosophy: Trader Vic — Methods of a Wall Street Master, Trader Vic II — Principles of Professional Speculation, and Trader Vic on Commodities: What’s Unknown, Misunderstood, and Too Good To Be True
• 2008 Inductee into the Trader Hall of Fame by Trader Magazine and included on Ziad Adelnour’s list of top 100 Wall Streeters
• Featured in the best-selling books New Market Wizards and Super Traders
• Twice profiled in Barron’s: “Man of all Markets” on May 2, 1983, and “Trader Vic the Ultimate Wall Street Pro” on September 21, 1987. He has also written articles and editorials for The Wall Street Journal and Stocks & Commodities.
• Appearances on financial programs on CNBC, CNN, Fox and other networks

Bibliography

• Trader Vic – Methods of a Wall Street Master, John Wiley & Sons, 1993, ISBN 0-471-30497-2.
• Trader Vic II : Principles of Professional Speculation, John Wiley & Sons, 1994, ISBN 0-471-53577-X.
• Trader Vic on Commodities: What’s Unknown, Misunderstood, and Too Good To Be True, John Wiley & Sons, 2008, ISBN 0-470-10212-8.
• Sperandeo has also authored articles and editorials for dozens of publications including Barron’s, The Wall Street Journal, Institutional Investor and many other professional magazines.

References

• Trader Vic – Methods of a Wall Street Master, John Wiley & Sons, 1993, ISBN 0-471-30497-2.
• Trader Vic II : Principles of Professional Speculation, John Wiley & Sons, 1994, ISBN 0-471-53577-X
• Trader Vic on Commodities: What’s Unknown, Misunderstood, and Too Good To Be True, John Wiley & Sons, 2008, ISBN 0-470-10212-8.

External links

• Victor Sperandeo website
• http://www.aftllc.com/victor_sperandeo.html Victor Sperandeo] - information on the Alpha Financial Technologies website
• Victor Sperandeo interviewed by GoldMoney Foundation
• Sperandeo interviewed by the Curmudgeon: Has America Become a Socialist Country? [1]