Episode summary
How to Become a Super Trader | TCAF 209
Ask The Compound
· · Hosts: Michael Batnick, Josh Brown · Guests: Tom Sosnoff
Summary
Tom Sosnoff argues that trading success comes less from forecasting markets and more from thinking like a contrarian, managing size, and understanding probabilities. He describes his origins as a floor trader in Chicago in the early 1980s, where he learned to take the other side of customer flow and make money day by day rather than by having a macro view.
A big part of the conversation is about how Tastytrade was built around that philosophy. Sosnoff says the firm is overwhelmingly an options, futures, and futures-options business, and that its edge is not prediction but education: teaching retail traders how to structure trades with better odds, tighter risk, and a clear understanding of volatility. He argues that modern retail investors are far more informed and capital-efficient than they were decades ago, and that technology now makes sophisticated strategies accessible to almost anyone.
He also makes a strong case that most traders should think in terms of win rate, trade size, and discipline rather than big opinions. While he acknowledges that many people get hurt, he says the retail trading boom has been broadly positive because it has brought more people into market participation and financial education. The episode also covers the rise of Thinkorswim, the sale to TD Ameritrade, and the cultural difference between Chicago trading floors and the newer, more digital trading world.
Key takeaways
- Sosnoff says he learned to trade as a floor market maker, which made him a permanent contrarian focused on customer order flow, not market predictions.
- He says Tastytrade is mainly a derivatives business, with roughly 90% to 95% of activity in listed options, futures, and futures options.
- He argues that retail traders can improve their odds with probability-based structures, but that higher win rates usually come with lower upside and strict position sizing.
- Sosnoff says the retail trading boom has been positive overall because it expanded market participation and financial education, even if some traders get hurt.
- He says Thinkorswim and Tastytrade were built on the same idea: give traders better technology and teach them how markets actually work.
Notable quotes
“I grew up never having an opinion about the markets. I grew up just taking the other side of what anybody else wanted to do”
“I'm a pure contrarian. Okay. Because that's where the money that's where the money is to be made”
“our business is volatility based”
“we built Tasty to to build a firm strictly around around quantitative, you know, probabilities, statistics, um quantitative just math”
“the only way genius fails is when you trade too big”
How the episode opens
Tom, this is so exciting. I I I uh I've been looking forward to this since we scheduled it. And so happy to see you here.
Nothing's off limits. Okay. Nothing.
And you could go as long as you want. I have no agenda. My I have a show tomorrow in town, but that's it.
Where you headed? Awesome. Exchange.
No, no, no, no. We have our We do our own shows. So, I have a show at um Webster Hall.
You know where that is? It's on It's on 11th. It's on 11th Street.
It's a It used to be the Ritz like when I was a kid. And um yeah, we've got like who's come so who comes to that? Who comes retail retail?
We have like a thousand a little over a thousand people signed up. That's unbelievable. But we do them all over the country.
Like two weeks ago I was in San Francisco and next weekend we're not this coming week and the weekend after that we're in LA, you know. Can I ask you a question? Yeah.
It's weird. So we started doing live events and we've done some really successful ones. You can put that on.
Okay. And we um we did one in Chicago at the Chop Shop and we sold it out and it was great. Yeah.
One of the problems we're having. Do I need to wear this? Yeah, it helps.
It because it it helps for the recording. One of the Because when I because when you say something really funny and I and I want people to acknowledge it. All right.
We have problem finding the venue that matches the size of the audience. So like which How many people do you have? That's the thing.
It depends on where we are.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- trading mindset
- state of the markets
- retail trading
- thinkorswim
- options strategies
Companies and tickers mentioned
- thinkorswim
- TD Ameritrade
- tastytrade
Watch the episode
Watch “How to Become a Super Trader | TCAF 209” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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