The Rise and Fall of Credit Vol

Published on
April 16th, 2019
58 minutes

The Rise and Fall of Credit Vol

The Interview ·
Featuring Kieran Goodwin

Published on: April 16th, 2019 • Duration: 58 minutes

Kieran Goodwin, co-founder of Panning Capital Management, joins Tony Greer of TG Macro to discuss the highs and lows of his quarter-century of trading experience. Goodwin and Greer take us all the way from the infancy of the CDO market and the 1990s emerging market crises to the uncanny low-volatility credit trading environment of today. In addition to his roots as a trader, hedge fund success, and hedge fund launch, Goodwin sheds light on his segue to more entrepreneurial pursuits. Filmed on March 27, 2019 in New York.



  • CM
    C M.
    17 April 2019 @ 02:21
    Love to hear these stories about how people developed their career, but will say this ran long and not sure what my takeaway was. Needs to transition to more conversation about how to manage money and risks.
    • MC
      Matt C.
      17 April 2019 @ 06:11
      I think the stop out lesson was the message. This was unique in that it was the first RV interview I've heard where a successful trader saw that they wanted something else outside of Wall Street and went for it.
    • my
      markettaker y.
      17 April 2019 @ 20:21
      watch in double speed. This was great.
    • DC
      Dan C.
      22 April 2019 @ 08:12
      I agree. I think the interview did very well at what it was trying to do but I'm not sure what the takeaway was from this. I'm of a mixed mind on these types of interviews but given the opportunity cost, they're probably not for me. I'm not criticizing though. I'm not a trader, just a John Q Public interested in macro and what's going on in the world of finance. Just my perspective.
  • JW
    James W.
    22 April 2019 @ 02:38
    t would be a great improvement if RV would make it a point to include some current market analysis in these chit-chats.
  • SD
    Sean D.
    20 April 2019 @ 19:47
    Insightful interview, thank you. Kieran - I am curious with your long volatility bias and naturally skeptical disposition, how you are investing your personal capital now (acknowledging that you are not watching markets closely)?
  • my
    markettaker y.
    17 April 2019 @ 20:05
    I didn't quite grasp the reference to convertible bond arbitrage. Can anyone help? Goodwin says: "Or you were a convert bond arbitrage. Guy who is in this amazing equity vol market, they're buying vol cheap, and then they're hedging. They're selling stock to hedge the delta, but they're still a long vol. But they still have credit risk, so they were like, I'll pay up to hedge credit risk. I don't care, because I'm making so much money in vol trading." What is the combination of options/CDS/debt/equity that would express this positioning? Can't quite grok it.
    • KG
      Kieran G. | Contributor
      17 April 2019 @ 22:38
      In '99 through '02, volatility in many big cap tech stocks was realizing 70+% over many months. A company like Corning, GLW issued a convertible that was puttable and callable in 5 years so essentially a 5 year convert. The terms on the convert were 0% coupon and convertible up 40% from the spot price of the stock. So the company looked at the convert as cheap financing. However if a convert arb trader priced the 5 year call option embedded in the convert, they saw the option being priced at 40% vol (very cheap to realized) so they were willing to pay up to hedge the credit risk of the convert and would bid up to buy CDS on GLW. They would sell stock to hedge the delta risk of the embedded call option and trade the delta of the option to realize the "alpha" between realized vol and implied vol.
    • RR
      Ryan R.
      20 April 2019 @ 01:15
      Hi Kieran, can you provide some resources (books, courses, etc.) / advice that would give more real world trade examples like you just gave? That’s the best concrete example I’ve seen yet. Thank you.
  • VS
    Vasil S.
    19 April 2019 @ 03:27
    Like many have said, loving the frontline trading stories that have become a staple of TG's interviews. Kieran seems a humble guy and his desire to give something back by moving into the Public Sectors speak a lot for his morals. Great interview guys!
  • TG
    Tony G. | Contributor
    16 April 2019 @ 11:35
    Ok I'll start. Maybe it's because he's my friend, and our lives have overlapped so closely for 30 years, but I enjoyed this.
    • MC
      Michael C.
      16 April 2019 @ 17:44
      One of the best interviews I've watched on rv. Great conversation.
    • CT
      Christopher T.
      17 April 2019 @ 01:26
      hands down my favorite interviewer
    • my
      markettaker y.
      17 April 2019 @ 20:22
      It was really a great watch. These trips down memory lane are totally fascinating.
  • PG
    Philippe G.
    17 April 2019 @ 00:14
    Love hearing about these front line trenches stories in all of the TG interviews! Great stuff!
    • TG
      Tony G. | Contributor
      17 April 2019 @ 15:45
      Thanks Phillippe
  • TJ
    Terry J.
    17 April 2019 @ 11:35
    Fascinating discussion and interesting to get another perspective on the scary sub prime mortgage credit period, having enjoyed Danny Moses recollections recently. These life story videos from people like Kieran I find are very helpful for getting a handle on how markets on Wall Street and elsewhere have evolved, and changed. It's like getting a real time picture of the action as it happened. I also agree with everyone who thinks Tony is natural for the interviewing role. Thanks RV
    • TG
      Tony G. | Contributor
      17 April 2019 @ 15:43
      Terry J. - I'm honored you said that thank you. Kieran laid down some great market history didn't he?
  • IM
    Istvan M.
    17 April 2019 @ 01:30
    good stuff
  • VP
    Vincent P.
    16 April 2019 @ 19:15
    Really enjoyed the interview, although bittersweet because there's nothing left to compete with in today's "reformed" market environment. Congratulations on a nice career Kieran and good job Tony.
    • TG
      Tony G. | Contributor
      16 April 2019 @ 21:30
      Quite appreciate that comment Vincent, thank you. There is nothing left to compete.
  • NG
    Nick G.
    16 April 2019 @ 19:44
    "Salomon was an Alpha male place. No Mums were looking over you." LOL. You should have been there in the '80s. Even God was scared to enter The Room.
    • TG
      Tony G. | Contributor
      16 April 2019 @ 21:29
      I remember my Dad used to have a 300lb guy sitting next to him smoking cigars on the desk - ALL DAY. Mayhem.
  • FC
    Frank C.
    16 April 2019 @ 12:25
    “Stocks, gold copper...everything is bid.” What does “bid” mean? Thank you!
    • WB
      Wes B.
      16 April 2019 @ 16:30
      Market speak for buyers bidding up prices.
    • FC
      Frank C.
      16 April 2019 @ 20:12
      Got it. Thanks!
  • JA
    James A.
    16 April 2019 @ 16:36
    Quality interview, the hour whizzed by watching this. TG, you're a natural in front of the camera.
    • TG
      Tony G. | Contributor
      16 April 2019 @ 18:40
      way too kind, but I do enjoy it.
  • RM
    Richard M.
    16 April 2019 @ 16:59
    Great conversation Tony! Really enjoyed some of the nitty-gritty details of the credit markets during those tumultuous times - fascinating stuff.
    • TG
      Tony G. | Contributor
      16 April 2019 @ 18:39
      Thank you Richard.
  • WS
    William S.
    16 April 2019 @ 18:16
    As a London based USD corp bond trader in the 90s, enjoyed the trip down memory lane. Negative carry on the book, constant repo specials, ridiculous vig on treasury futures, inverted B/A for top clients, aggressive syndicate support....thank goodness for the continental private banks. At the time, the credit derivative guys were reading legal docs and bickering on how to settle a trade while the cash guys were all mine-yours 10 hours a day. Never had more fun!
  • CO
    Casual O.
    16 April 2019 @ 17:33
    Ill give the app a try
  • MN
    Maverick N.
    16 April 2019 @ 16:53
    Good interview, not much technical content discussed but experiences are also equally valuable. Bring Kieran back pls. PS : That app is going to die.