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Optionetics Commentary

Interview Central: Timothy Sykes, Part I


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Jeff Neal, Optionetics.com
March 13, 2009


Timothy Sykes, the author of the book An American Hedge Fund: How I Made $2 Million as a Stock Operator & Created a Hedge Fund, was the #1 ranked short bias hedge fund manager 2003-2006 (Barclays), and star of the hit TV show "Wall Street Warriors." It was a real pleasure to be able to speak Tim about his trading experiences.

This is the first part of that conversation.

Optionetics: How did you first become interested in trading the markets?

Tim: Back in early 1999, I was in high school, the stock market was going ballistic and a tennis injury sidelined me so I took an interest in the markets. My parents gave me control of $12,000 in Bar Mitzvah gift money, confident I'd lose it all and that it'd be a great lesson for me (tough love!), but instead I turned that $12,000 into $123,000 by the beginning of 2000 and then over $800,000 by the end of 2000. It was pure madness to a middle-class kid like me, but as I covered in the first third of my book "An American Hedge Fund", my strategy of buying penny stock breakouts was perfect for that market environment (little did I know I was piggybacking boiler rooms!)

Optionetics: What are the things you like best about the trading business?

Tim: I love the challenge of trying to find lasting strategies and patterns in continually changing markets. I've been forced to adapt several times throughout my decade-long trading career.

The key to success-publishing and trading-is simply being open and honest. Who would have ever thought brutal honesty would be such a revolutionary concept-only in the joke that is the "trading business".

Optionetics: How do you treat losses and how do you go about establishing your risk tolerance before the trade is entered?

Tim: My risk tolerance is simple: if a stock doesn't act EXACTLY the way I thought it would when I first entered the trade, I get out. It doesn't matter if I have a small profit or small loss, low priced stocks move so quickly-and I'm trading the most volatile of the bunch-that I can't risk getting stuck in a pattern I'm not 100% sure about.

Optionetics: Thanks, Tim, for sharing 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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