Creativity. What you said. No more 10x improvement opportunities. Just marginal adjustments. Maintenance. Running the same model a bit more efficiently, carving off minuscule edge cases here and there.
> what the heck is an "aerospace investment banker"
A made-up moniker. I raised money—and did deals, e.g. IP licensing, M&A, PPP, et cetera—for rocket, satellite, drone and adjacent start-ups before that was a thing. I had enough technical knowledge to know we were and are on a precipice. Computer-aided design, singularly, as well as new fluid dynamics numerical methods being unsung and recent game changers; falling launch costs our transcontinental railroad. But not enough to do the work myself. So I sold and structured, things I am good at, while reading Banks and Nivens and K.S. Robinson on the weekends.
Really rewarding work. Didn’t pay that much, unfortunately, though the resulting equity changed my life.
No creativity makes it sound like the market has been figured out. I know that isn't true, so does that mean that the risk/reward of strategies has flattened off (I.e. same risk for less reward) because there are less opportunities to exploit?
> No creativity makes it sound like the market has been figured out
That was my bet. It has, so far, been a good one.
> does that mean that the risk/reward of strategies has flattened off (I.e. same risk for less reward) because there are less opportunities to exploit?
Your instinct was on point. You don’t need someone with a feel for volatility to make money (or not lose it) in options market making anymore. The work consists of, and will for some time, re-implementing existing ideas. There are still mis-pricings. But they aren’t inherent to the pricing model. The commodity component can be isolated and run with an eye towards costs and economies of scale.
(This has been a fun conversation, by the way. Thank you.)
> There isn’t much risk anymore which means there isn’t room for ingenuity—it’s execution, mechanical
What do you mean by ingenuity here? Like coming up with your own model that was better than other people's models, or new strategies, etc?
Also, what the heck is an "aerospace investment banker"? Someone in IB who only works on aerospace stuff?