Interview Central: David Fry, Part II
July 3, 2008
Dave Fry has devoted more than 35 years to the business of trading and portfolio management. His registration as an arbitrator with both the National Association of Securities Dealers [NASD] and the National Futures Association [NFA] attests to his extensive experience and spotless compliance record. He founded the ETF Digest in 2001 and was among the very first to see the need for a publication that provided individual investors with information and advice on ETF investing.
He is a frequent commentator on ETFs and other issues important to individual investors, and his perspectives are featured in financial news sources such as The Wall Street Journal, MarketWatch, Investor’s Business Daily, Smart Money, Dow Jones Newswire, National Business Review, MSN Money, Yahoo! Finance, Bankrate.com, Emerging Markets Monitor, IndexUniverse.com, and ETF Investor.
Prior to starting ETF Digest, David owned and operated an NASD broker/dealer, Fry & Co., and an SEC registered investment advisory firm, Asia-Pacific Investment Management Inc. He was also a registered Commodity Pool Operator, Commodity Trading Advisor, and Introducing Broker.
I really enjoyed my recent conversation with David Fry about how he manages his trading business. This is the second part of that interview.
Optionetics: Are your trading systems geared more toward long-term strategies or short-term strategies?
David: We’re position traders and take a longer-term view relying mostly on weekly charts.
Optionetics: What are some of the key rules or factors that you consider before selecting any potential trading opportunity?
David: We’re trend-followers and use primarily ETFs. While we like to be opportunistic in some areas we use a fixed menu of products to choose from for basic portfolios. We use a proprietary system to identify opportunities and implement positions in those ETF sectors we target.
Optionetics: What are your favorite markets that you like to trade and track with your analysis tools?
David: As trend-followers, we like to stay with the best trends obviously. Over the past few years that has meant staying with commodities, currencies and emerging markets.
Optionetics: What is your most memorable trade?
David: In 1987 we purchased one year put options [when they were first launched] on the S&P before the crash for a very small 3% premium. When it occurred I just had my feet up on my desk and was quite calm while other brokers were panicking. Further we had a CTA running futures for those clients so willing and we made significant profits in addition to neutralizing the losses.
Optionetics: With all the different technical as well as fundamental analysis tools out there how does a new trader avoid information overload or "analysis paralysis"?
David: You must stick with what you do and tune all that out. In fact, one Sacred Cow I publish for subscribers is to turn the TV off during market hours and focus on your systems period. Unless something worthwhile is pointed out to me or something significant happens I won’t review 3rd party information intraweek. I do try to catch-up on things over the weekend generally.
Optionetics: Thanks, David, for speaking about your trading approach with our Optionetics reading audience.
To read previous installments of this interview, please click here.
Jeff Neal
Senior Writer, Options Strategist & Profit Strategies Radio Show Market Correspondent
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