Victor Sperandeo
Encyclopedia
Victor Sperandeo is a trader, index developer, and financial commentator based in Dallas, Texas. He has over 40 years of experience trading both independently and for the likes of George Soros
and Leon Cooperman. Sperandeo was featured in the best-selling The New Market Wizards and Super Traders, has been profiled in Barron’s, The Wall Street Journal and Stocks & Commodities, and appears regularly on CNBC, CNN, Fox, and other networks. Sperandeo has authored two books detailing his philosophy: Trader Vic – Methods of a Wall Street Master and Trader Vic II – Principles of Professional Speculation.2 John Wiley & Sons
released Sperandeo’s third book on trading in 2008. It is entitled Trader Vic on Commodities: The Unknown, Misunderstood And Too Good To Be True.3
Sperandeo developed the Diversified Trends Index (DTI), a commodity and financial futures index, which was subsequently licensed to Standard & Poor’s as the S&P Diversified Trends Indicator by Alpha Financial Technologies, LLC, of which Sperandeo is the President and CEO. It is now known simply as the Diversified Trends Indicator or DTI and is now licensed to several new licensees directly by AFT. In addition, Sperandeo developed the Commodity Trends Indicator (CTI) and the Financial Trends Indicator (FTI) and various other futures-based indexes and trading strategies.
soon after its founding in 1973. Sperandeo served as Ragnar’s President from its inception until February 1977, when its operations were merged into Weeden & Co., an institutional broker and trading firm. Sperandeo continued to trade options at Weeden, where he also became a block trader in so-called ‘glamour’ 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., a trading firm, where Sperandeo 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, Sperandeo also 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 Co. Inc., now a commodity pool operator and commodity trading advisor. During this time period, Sperandeo was also 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.
” futures-based indices created by Victor Sperandeo such as:
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’s core indexes are now licensed to new licensees directly by AFT.
AFT has received two patents in the U.S., two in the Bahamas and one in Australia on financial products using long/short indicators or indexes in conjunction with leverage, which seek to add alpha while simultaneously reducing risk.
Currently, there is approximately $3 billion invested in products linked to AFT’s indexes. Licensees include Rydex|SGI, Direxion Funds, Goldman Sachs
, Merrill Lynch
, Macquarie
, Nomura
, Carnegie, Nordea
, SEB
, Credit Suisse
, Bank of Ireland
, Claymore, Nikko
, Barclays Capital
, and HSBC
.
EAM is an investment management firm focused on alternative investments, primarily commodity and global macro
strategies. Also, Enhanced Alpha Management, L.P., a subsidiary of EAM, develops “black box” indices such as the Trader Vic Index, which was licensed to the Royal Bank of Scotland
(“RBS”) in the second quarter of 2009.
EAM will soon be launching a multi-strategy hedge fund that combines several of his proprietary indices together. The fund will be available to investors in early 2012 and the strategy can also be customized for specific mandates (Liability Driven Investments). For example, a pension fund has an actuarial rate of return of 7.3% and wants to hit that number with as little volatility as possible. EAM will create a custom blend of their funds to return between 7% and 7.5% with a low standard deviation of returns.
He has made numerous appearances on financial programs on CNBC, CNN, and other networks, offering his insights and expertise — particularly on commodities — to the viewing public. Sperandeo has been profiled twice in Barron’s — “Man of all Markets”, on May 2, 1983, and “Trader Vic the Ultimate Wall Street Pro”, on September 21, 1987. His philosophies and methodologies have also been featured at length in the books Super Traders, and New Market Wizards. He has also been included on Ziad Adelnour's list of top 100 Wall Streeters.
George Soros
George Soros is a Hungarian-American business magnate, investor, philosopher, and philanthropist. He is the chairman of Soros Fund Management. Soros supports progressive-liberal causes...
and Leon Cooperman. Sperandeo was featured in the best-selling The New Market Wizards and Super Traders, has been profiled in Barron’s, The Wall Street Journal and Stocks & Commodities, and appears regularly on CNBC, CNN, Fox, and other networks. Sperandeo has authored two books detailing his philosophy: Trader Vic – Methods of a Wall Street Master and Trader Vic II – Principles of Professional Speculation.2 John Wiley & Sons
John Wiley & Sons
John Wiley & Sons, Inc., also referred to as Wiley, is a global publishing company that specializes in academic publishing and markets its products to professionals and consumers, students and instructors in higher education, and researchers and practitioners in scientific, technical, medical, and...
released Sperandeo’s third book on trading in 2008. It is entitled Trader Vic on Commodities: The Unknown, Misunderstood And Too Good To Be True.3
Sperandeo developed the Diversified Trends Index (DTI), a commodity and financial futures index, which was subsequently licensed to Standard & Poor’s as the S&P Diversified Trends Indicator by Alpha Financial Technologies, LLC, of which Sperandeo is the President and CEO. It is now known simply as the Diversified Trends Indicator or DTI and is now licensed to several new licensees directly by AFT. In addition, Sperandeo developed the Commodity Trends Indicator (CTI) and the Financial Trends Indicator (FTI) and various other futures-based indexes and trading strategies.
1968–2000
Sperandeo 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, Sperandeo moved to U.S. Options, also a stock options dealer, where he continued as a securities option trader for bank and trust company clients. He became a portfolio manager for Marsh, Block & Lieber, a broker-dealer and trading firm, in September 1970 but soon left in order to launch Ragnar Option Corporation, an OTC securities options dealer, 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 ExchangeChicago Board Options Exchange
The Chicago Board Options Exchange , located at 400 South LaSalle Street in Chicago, is the largest U.S. options exchange with annual trading volume that hovered around one billion contracts at the end of 2007...
soon after its founding in 1973. Sperandeo served as Ragnar’s President from its inception until February 1977, when its operations were merged into Weeden & Co., an institutional broker and trading firm. Sperandeo continued to trade options at Weeden, where he also became a block trader in so-called ‘glamour’ 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., a trading firm, where Sperandeo 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, Sperandeo also 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 Co. Inc., now a commodity pool operator and commodity trading advisor. During this time period, Sperandeo was also 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 has served as president and CEO of Alpha Financial Technologies, LLC (AFT) and Enhanced Alpha Management 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 boxWhite box
White box may refer to:*White-box testing, a specification conformance test*White box , a personal computer assembled from off-the-shelf parts*White box , a subsystem whose internals can be viewed...
” futures-based indices created by Victor Sperandeo such as:
- the Diversified Trends Indicator or DTI, a long/short rules-based, investable managed futures index incorporating a diversified group of 24 components, 50% each of exchange-traded commodity and financial futures contracts.
- Commodity Trends Indicator or CTI, a long/short rules-based, investable commodity futures index incorporating a diversified group of 16 tangible commodity futures contracts (no financials)
- Financial Trends Indicator or FTI, a long/short rules-based, investable financial futures index incorporating a diversified group of 8 global financial and currency futures
- Foreign Exchange Trends Index (FXTI) provides investors a banchmark for a tactical allocation between physical commodity futures and interest rate futures.
- GETS TW Index reflects a retrospective application to past market histories of the following "static" group of five equity indexes, each representing key regions of the world; the Hang Seng, NDX, Topix, Straits Times and DAX.
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’s core indexes are now licensed to new licensees directly by AFT.
AFT has received two patents in the U.S., two in the Bahamas and one in Australia on financial products using long/short indicators or indexes in conjunction with leverage, which seek to add alpha while simultaneously reducing risk.
Currently, there is approximately $3 billion invested in products linked to AFT’s indexes. Licensees include Rydex|SGI, Direxion Funds, Goldman Sachs
Goldman Sachs
The Goldman Sachs Group, Inc. is an American multinational bulge bracket investment banking and securities firm that engages in global investment banking, securities, investment management, and other financial services primarily with institutional clients...
, Merrill Lynch
Merrill Lynch
Merrill Lynch is the wealth management division of Bank of America. With over 15,000 financial advisors and $2.2 trillion in client assets it is the world's largest brokerage. Formerly known as Merrill Lynch & Co., Inc., prior to 2009 the firm was publicly owned and traded on the New York...
, Macquarie
Macquarie Group
Macquarie Group Limited is a global investment banking and diversified financial services group, providing banking, financial, advisory, investment and funds management services to institutional, corporate and retail clients and counterparties around the world...
, Nomura
Nomura
Nomura Nomura Nomura (野村 (field village), 埜村 (wilderness field) is a Japanese surname. It can refer to:-Finance:*Nomura Holdings, part of the Nomura Group (also including Nomura Securities Co.)-People:*Don Nomura (born 1957), Japanese-American baseball agent...
, Carnegie, Nordea
Nordea
Nordea Bank AB is a Stockholm-based financial services group operating in Northern Europe. The bank is the result of the successive mergers and acquisitions of the Swedish, Finnish, Danish and Norwegian banks of Nordbanken, Merita Bank, Unibank and Kreditkassen that took place between 1997 and 2000...
, SEB
Seb
Seb is a diminutive of the given name Sebastian. "Seb" may also refer to:*A god in Egyptian mythology also known as Geb*Sebastian 'Seb' Coe , British athlete and politician*Seb Fontaine, DJ with English dance/electronica outfit Reflekt...
, Credit Suisse
Credit Suisse
The Credit Suisse Group AG is a Swiss multinational financial services company headquartered in Zurich, with more than 250 branches in Switzerland and operations in more than 50 countries.-History:...
, Bank of Ireland
Bank of Ireland
The Bank of Ireland is a commercial bank operation in Ireland, which is one of the 'Big Four' in both parts of the island.Historically the premier banking organisation in Ireland, the Bank occupies a unique position in Irish banking history...
, Claymore, Nikko
Nikko Citigroup
is a financial services firm in Japan. It is a joint venture between Citigroup and the Nikko Cordial Corporation.Nikko Cordial and Citigroup first established a joint venture in Japan in 1999 as Salomon Smith Barney Japan Ltd., a company registered and domiciled in the Cayman Islands which operated...
, Barclays Capital
Barclays Capital
Barclays Capital is a global British investment bank. It is the investment banking division of Barclays plc which has a balance sheet of over £1.2 trillion . Barclays Capital provides financing and risk management services to large companies, institutions and government clients. It is a primary...
, and HSBC
HSBC
HSBC Holdings plc is a global banking and financial services company headquartered in Canary Wharf, London, United Kingdom. it is the world's second-largest banking and financial services group and second-largest public company according to a composite measure by Forbes magazine...
.
EAM is an investment management firm focused on alternative investments, primarily commodity and global macro
Global macro
Global Macro is defined as the strategy of investing, on a large scale, around the world using economic theory to justify the decision making process...
strategies. Also, Enhanced Alpha Management, L.P., a subsidiary of EAM, develops “black box” indices such as the Trader Vic Index, which was licensed to the Royal Bank of Scotland
Royal Bank of Scotland
The Royal Bank of Scotland Group is a British banking and insurance holding company in which the UK Government holds an 84% stake. This stake is held and managed through UK Financial Investments Limited, whose voting rights are limited to 75% in order for the bank to retain its listing on the...
(“RBS”) in the second quarter of 2009.
EAM will soon be launching a multi-strategy hedge fund that combines several of his proprietary indices together. The fund will be available to investors in early 2012 and the strategy can also be customized for specific mandates (Liability Driven Investments). For example, a pension fund has an actuarial rate of return of 7.3% and wants to hit that number with as little volatility as possible. EAM will create a custom blend of their funds to return between 7% and 7.5% with a low standard deviation of returns.
Reputation
Sperandeo was a 2008 Inductee into the Trader Hall of Fame by Trader Magazine, and named “The Ultimate Wall Street Pro” by Barron's.He has made numerous appearances on financial programs on CNBC, CNN, and other networks, offering his insights and expertise — particularly on commodities — to the viewing public. Sperandeo has been profiled twice in Barron’s — “Man of all Markets”, on May 2, 1983, and “Trader Vic the Ultimate Wall Street Pro”, on September 21, 1987. His philosophies and methodologies have also been featured at length in the books Super Traders, and New Market Wizards. He has also been included on Ziad Adelnour's list of top 100 Wall Streeters.