Interview: George Fontanills Of Optionetics by Jayanthi Gopalakrishnan
You might assume that graduates of Harvard Business School know
everything they need to know, but George Fontanills, cofounder of
Optionetics, is an active trader and Harvard grad who learned quickly
that he had a lot more to learn.
Disbanding his real estate business in the 1980s, George Fontanills
made a decision: his new business would be trading. After years of study
and practice, he developed a new method of making money: delta-neutral
options trading. He called his technique optionetics, and now Optionetics
is a leading education and publishing firm dedicated to teaching investors
how to trade options effectively. What can George Fontanills tell us about
successful options trading? STOCKS & COMMODITIES Editor Jayanthi
Gopalakrishnan spoke with Fontanills on June 2, 2004.
Would you start by telling us
about how you got interested
When I got started, I had
no idea what trading really was. After I graduated from Harvard
Business School I basically started my
own business, in real estate. That was in
the 1980s. But if you look at the 1980s,
youíll see that in about 1986Ė88, interest
rates just got way too high, and being
in real estate was not a good idea anymore.
Someone in my office traded for
himself, and he said: ďHey, Iíve got a
great idea. Instead of doing this real
estate stuff, why donít we do some
trading?Ē I didnít really know what that
meant, but he explained it to me, saying,
ďYou buy if you think itís going up, and
you sell if you think itís going down,Ē
and I thought I could figure that out.
Obviously, it was a little tougher than I
thought it would be.
So when you started, were you doing
Yes, primarily short-term trading,
trading index options and some commodities.
And you began with options?
With index options, then commodities. I didnít know what an
option was, just like a lot of
people who start from
scratch. I didnít read any
books, but I relied on this
individual who worked for
me to tell me what to do. It
didnít turn out very well after
30 days, so I decided I
had to learn how to do it
myself. I think thatís how a
lot of people learn!