Dave Puritz, Founder and CIO, Shaolin Capital Management

A quarter-century ago, as the original tech bubble began in earnest, the American Stock exchange was full of action. Populated with an aggressive throng of option traders, the Amex was a critical liquidity venue during a period of heady growth in the US listed options market. It was here, starting as a clerk, that Dave Puritz began to hone the craft that underpins his role today as founder and CIO of Shaolin Capital Management. Through our discussion, we learn of Dave’s sell-side experience, as a listed options trader at BofA and then as head of convertible bond trading at Deutsche Bank, and the lessons he gathered in balancing the facilitation of customer business with the management of proprietary positions. Much of our conversation centers on converts, an asset class in which Dave and Shaolin have gained prominence. Reflecting on the tremendous issuance already in 2021, Dave finds it important to assess the combination of high implied volatility and long duration associated with recent large deals. A very active participant in the SPAC market, Dave sees plenty of opportunity here but argues that the entry price matters and believes it is better to be a buyer of unloved securities than part of a gold rush in which valuation is cast aside. Lastly, we explore Dave’s philosophy of tail risk hedging and how he utilizes both listed options and credit protection to defend the portfolio against the disruption events that have become a frequent reality in modern markets. I hope you enjoy this episode of the Alpha Exchange, my conversation with Dave Puritz.