It might not be Top Chef, but the contestants in BattleFins Tournament 6.0 global portfolio management trading competition might be under even more pressure than the culinary artists on the Bravo program.
For the second year in a row, former chef and current trader Tim Fligg won his category in BattleFin Tournament 6.0, which is often referred to as the Hunger Games of Hedge Funds. Not bad for a classically trained chef who left his cooking job when a fellow chef got him interested in trading. Soon he was cooking up winning trades.
The 37-year-old graduate of DePaul University is a trader at a major buyside firm in Chicago — he asked that the firm not be named — but he plans to start his own hedge fund. The wheels are in motion, he told Traders.
For the BattleFin competition, Fligg planned an outline of a fund and got down to work. He created a portfolio and trading strategy that topped his division in the three-month competition, scoring the highest return. Fligg said that from February to April 2014, his fund achieved a 25 percent return. Last year, his return was 60 percent, he added.
Fligg used three strategies in his BattleFin competition. Typically Ill use long equities. Then I hedge that with some short futures at all times, and depending on the weight of the portfolio this tells me how short I have to be with the futures, he said. One of the traders from Advocate Capital [who lectured at DePaul] taught us a strategy where he doesnt do a trade unless he knows that there is a 95 percent chance that hell make it. Thats where I do all the massive option trades where Im normally going to make at least 4 to 5 percent on the account doing this one trade.
At the same time, I do covered calls on all the long trades, he said.
The competition was fierce, but he got to work right away. You start from scratch on day one with no return, and youve got to start trading, he recalled. Some other competitors took four or five days to start trading. I was out of the gate. You start at zero and thats just how they judge you.
He added that the BattleFin judges have strict rules. They have rules that you cant have more than a 5 percent drawdown. They monitor you daily and then upload the results to the scoreboard.
In his BattleFin investment game plan, Fligg avoids algorithms and dark pools Im not a fan of HFT, and for dark pools we use a brokerages smart order routers.
Even with his plans to start his own hedge fund, Fligg never misses the calm and quiet of a restaurants kitchen. There was no calm and quiet. This is just as hectic as the other job, and at the same time youve got deadlines and youve got to have stuff out and ready to go at a certain time, he said. Youve got people counting on you and thats stressful, too.
