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Ralph Mizrahi

December 20, 2016

Chapter 45 in the exclusive series for Dynamic Commodities- becoming a commodities trader

Ralph Mizrahi is a great guy. He was my savior in my early days on the options trading desk. Ralph is one of the funniest people I have ever encountered. He always had a joke and a way of laughing at his own that made them even funnier.

Ralph was an Egyptian Jew born in Cairo who came to the U.S. as a young child. He often told people as baby, he was delivered by a Cairo-practer. As I went through the process of learning options, Ralph drilled into my head an understanding of the risks related to options trading. He would give me problems, long one option and short another eventually graduating to multiple option positions. He would have me calculate the breakeven for the trade. When I got the answer wrong, he would patiently explain the calculation process. Ralph’s mind was quick, he was able to calculate the risk-reward considerations in his head in seconds while I needed a piece of paper and pencil. There were always many erasures in the early days. Eventually I got it, but it was not until after weeks if not months of drills with Ralph.

Ralph was Sid’s right-hand man in those days and the two were very close. However, Sid would get angry and impatient with Ralph at times given his constant banter and jokes and he would call him the “Arab” not in a complimentary way.

Ralph was friendly with everyone in the department which often annoyed Sid given his mistrust of most. At the end of each month, Ralph and I would stay at the office until late in the evening to calculate the profit and loss for the month. Pricing each option position in the book was not an easy task and the slightest mistake or mispricing could make the difference between a profit and a loss for the month. As we came up with numbers, Ralph would call Sid to report the P&L. Sid would always tell Ralph, not enough look for more money. Adding a little more premium to a long call or put or a little less on a short would achieve Sid’s desired profit for the month.

After a few months on the desk Sid took Ralph and me out to dinner for a strategy session. Going out to dinner was no big deal; we ate in the most expensive restaurants in New York City on a regular basis with customers, brokers or other dealers. However, this was different. Sid took us to Tads, the home of the $1.99 steak and potato. He told us that eating in the establishment Sid went to as a poor kid from the Bronx “builds character”. As we tried to choke down the greasy and grizzly meat, which Ralph said had marks in it from where the jockey was whipping it, Sid disclosed his big plan. Sid’s goal was to expand options to cover many other commodities and more importantly, to knock off John Gruen who had become his arch-enemy.

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Post Series: Origin Of A Commodities Trader

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