293 · Rick Bandazian Jr. - The Art of the Wait: Merger-Arbitrage Killer Moves
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Why did Rick Bandazian Jr. transition from being an analyst to a trader?
Rick wanted an immediate report card on his performance, which trading provided. He found the analyst role too political and felt that even if he outperformed others, his compensation was capped.
What was Rick's pivotal moment in his trading career?
Rick's pivotal moment came during the 2008 financial crisis when he made more money in 20 seconds from a quick trade on a merger announcement than he had as an analyst in a year. This experience solidified his focus on event-driven trading.
How does Rick Bandazian Jr. approach risk management in his trading?
Rick has a mental P&L threshold where he sets a dollar amount that, if hit, prompts him to exit a trade. He avoids over-leveraging and focuses on having an edge in his trades rather than relying on strict position sizing rules.
What is Rick's current strategy for event-driven trading?
Rick focuses on merger arbitrage and event-driven situations, keeping track of around 75 to 100 announced deals and other event-driven opportunities. He reacts quickly to news and maintains a deep understanding of the nuances of each deal to capitalize on market inefficiencies.
Why does Rick avoid trading based on analyst opinions?
Rick believes that analysts are more focused on how smart they are rather than providing actionable insights. He has observed over his career that analyst price targets and directional calls often miss the mark, making them unreliable for his trading decisions.
What is Rick's intermediate-term strategy, and how does it differ from his event-driven trading?
Rick's intermediate-term strategy involves macro trading, focusing on identifying overcrowded positions (offsides) in futures markets using CFTC data. This strategy is different from his event-driven trading as it requires a longer holding period, position sizing, and a deeper understanding of market setups.
How does Rick determine when to enter a trade in his intermediate-term strategy?
Rick looks for market confirmation or a
What does Rick struggle with most in his trading career?
Rick struggles most with periods of low activity or
How does Rick's experience as a volunteer firefighter influence his trading?
Rick views his role as a volunteer firefighter as a way to give back to the community and fulfill a sense of purpose. This experience has taught him discipline and the importance of staying ready, which he applies to his trading by being prepared for opportunities even during quiet periods.
What is Rick Bandazian Jr.'s substack about, and how can listeners reach him?
Rick's substack, called 'Off_the_Tape,' focuses on macro positioning and market analysis. Listeners can reach him through the substack, where his email is readily available for anyone interested in discussing trading or his process.
- Rick transitioned from investment banking to proprietary trading.
- He specialized in event-driven and merger arbitrage strategies.
- The 2008 financial crisis led to his layoff from a Canadian bank but also opened up new opportunities.
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