Alpha Exchange

The son of a physician and with a penchant for math, Andy Redleaf came upon options in high school, even before they were listed on the CBOE.  Post college, Andy landed in an option trading role and was making markets on the CBOE during the 1987 stock market crash. In his rendering, the introduction of stock index futures dramatically increased correlation among stocks and the creation of portfolio insurance left some investors short a put that no other investors were long.  In combination, this left the market vulnerable to such a sharp one day plunge in stock prices.  Our conversation considers market stress periods in the context of the neat mathematical models and their simplifying assumptions that may be enablers of these seismic events.We talk as well about Andy’s hedge fund career, first co-founding Deephaven and then founding Whitebox.  Both ventures were focused on exploiting mispricings in complex securities such as convertible bonds and the relative value between equity and corporate credit securit