EP 076: Insight from a former-risk manager of 120+ prop traders, and spread trading w/ Saul Knapp

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Our featured guest for this weeks interview is, Saul Knapp.

Saul originally started out as a runner on the floor of the LIFFE exchange (in London), when he was just 16 years old. Later moving on from there, he’s had various roles as a risk manager for proprietary trading firms, at times, monitoring positions for as many as 120+ traders. Today, Saul lives in Spain where he runs a small prop firm of his own.

In regard to how he trades, Saul is a spread trader who’s most active in the energy markets. So, spread trading is something we cover during our conversation, as well as his observations from being a risk manager and helping other traders improve.

If you have any questions, or if there’s anything which you’d like further explanation on, just write in the comments below to get a response from Saul.

Lessons learned in this interview:

  • Hear about Saul’s early experience trading on the floor, working as an assistant risk manager, and joining an early-stage prop firm (crammed into an attic).
  • Saul describes one of his worst trading days, where he was caught off-guard by a “super spike” caused from a fat-finger trade—he also explains the term ‘fat-finger’.
  • A detailed explanation of spread trading, what attracts Saul to this type of approach, and why spread trading can be more forgiving than outright trading.
  • How Saul managed risk for proprietary traders, the risk parameters he would (and wouldn’t) budge on, what’s often overlooked by less experienced traders.

“It’s not all about getting one trade right. It’s about staying in the game and having the right risk management.”

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