All-In Summit: Jenny Just on Peak6, the female market correction, poker, and risk

Jenny started her career on the trading floor in Chicago she co-founded Peak 6 in 1997 with one and a half million dollars in seed Capital as a proprietary options trading firm now it's a multi-billion dollar Financial Services trading and Technology firm really excited to hear from Jenny today please join me in welcoming Jenny to the stage [Applause] [Music] [Applause] [Music] drivers [Music] stupid women helicopter Pilots it's not Prejudice it's just that men are naturally Superior drivers many women are confident drivers women drivers that's the problem when a woman's at the wheel

polyglass means more than mileage welcome everybody and thank you for having me here today as as they said I'm Jenny and I started Peak sex in 1997 as a proprietary Equity options trading firm we've evolved over time into a technology firm including in the ensure Tech space and the one thing I know about these videos men are bad at math as you can see there's clearly no difference between driving abilities and insurance rates now a hundred years ago women were less than 10 percent of their drivers esteemed risky and a man's job but 50 years later

we see that has changed we see these kind of Trends again and again where participation rate eventually equals skill or ability we know that women are half of the voters they're more than half of the college graduates a really really important place it has not changed is in the financial world so P6 also owns as they were saying the Apex fintech Solutions it's a SAS based clearing and custody firm we have 220 B2B clients 120 billion in assets if tens of millions of end customers the truth is more than half of you are likely on our technology today and you didn't know it we are the back end for more than 60 percent of the fintechs out

there so think we both Sophie Ally stash etoro public you're probably on our technology and what we know about that data is it's like driving and voting and education there's no difference between investing doing one in between men and women however there is one big difference and that is participation rate I wonder why I have offered our lovely sales assistant Danielle Harrison here ten thousand dollars to shave a hands [Applause] [Music] so while we have many different businesses at Peak six the heart and soul remains our trading firm now when I started Peak sex in 1997 the world was

very different all the trading happened on The Exchange floors I was in those trading pits [Applause] so it's clear to me that things could probably be done a little bit better and in 1998 we actually started using technology and we became one of the first off floor Equity options trading firms in the world and despite all the booms and boss Cycles the.com the financial crisis covid Peak six has never had a losing year now we're not a fund we don't have outside money we had a little bit you heard in the beginning those investors were paid back many times over very early on

you know I could have invested in bonds or stocks or Berkshire Hathaway or Steve Jobs and Apple but I invested invested idea I could see I invested in the proposition that a female Trader could hang with the guys so so how did that turn out for me uh bonds 100 invested in 1997 now worth about three hundred dollars the market about seven hundred dollars Mr Buffett twelve hundred dollars Apple a hundred and eighty thousand dollars Peak six well a hell of a lot more so how well it starts with understanding options in in the options World there are almost

six thousand stocks that have listed options and that's all the different times and expirations so call it a million and a half ish Securities at any given point in time Peak six will have positions in three to four thousand of those stock names with their Associated positions so while it requires a lot of Technology obviously to manage this we're not a high frequency firm we actually carry the inventory we have it on our books as we speak so I think high frequency it's more like a delivery service they don't really take risk and it's just about speed and efficiency a really good way to think about Peak six is like a grocery store

so we're servicing our customers and we need to manage the inventory well we're much closer to like a Walmart or a safe way and like them if we don't manage the inventory well it goes bad we lose so in the same way that prices at their store are going to move around based on consumer demand or on outside forces on supplied like Logistics or weather option prices are moving around as well remember we're trading in these 6 000 different names with different time frames all unique characteristics different earnings different dividends we're trading hundreds of thousands of options every single day

so our biggest expense as you might imagine is technology we're receiving billions of messages per second so we get the entire Marketplace what do we see what's moving into extremes we might be looking at individual names that are doing that Industries or the marketplace as a whole so what am I seeing today well most people know that over time stocks outperform bonds you take risk you should be rewarded now if we look at how much better off you'd be by buying stocks you can see it moves in a relatively stable line upward sloping with some periods where stocks are more

or less expensive or cheap some of you remember the.com bubble some of you pretty young out there most of us will remember the financial crisis you can see that second star obviously covid and I clearly no surprise to see these kind of disruptions show up then you can see today and you can see today now there are a lot of people who are talking about this and for me I've seen a lot and it's really hard to call it top or bottom and we don't pretend to call Tops or bottoms frankly but what's unusual this time is that when things get stretched risk or the cost of options tends to be

expensive today you can see the previous three from the last slide and look at today how low volatility is this is why at this point in in the month of August we've owned more options in our portfolio than it's probably top five in our history so our key to success is to manage the inventory top down and bottoms up all day every day and when the great ideas we got to push all in when they come we push all in and as good as this opportunity might seem I'm going to tell you about an opportunity that makes that small in comparison there is going to be a market correction

the correction is that half of the participants are going to identify as female how I'll take it [Applause] hopefully it's not a surprise to this room but it's been right underneath our nose for a really long time we are going to teach them poker now most of you know that poker teaches indispensable life skills certainly our lovely hosts espouse this all the time teaches strategy it teaches taking risk it teaches Capital allocation I could go on and on but guess what men are getting those lessons lessons and women are not

of the more than 110 million plus nobody really knows a number poker players in the world less than 10 percent are women just like driving a hundred years ago so we started a company it's called poker power even though they said power poker I'll take either as long as you're saying it it's called poker power we're on a mission to teach a million women this game to to date we've taught tens of thousands of individual women interestingly we just hit our 200th mark we're teaching companies who recognize how important this skill can be to their employees

and they are teaching this game alongside of us some of the biggest tech companies in the world the biggest banks investment Banks law firms you name it so when I look it out of this crowd frankly it looks fairly similar-ish to the trading floor many years ago and in five years it's going to look very different that is my prediction hopefully sooner how well it starts by going actually going actually going all in we're not all in if 50 of the population trades invests or plays poker podcast is not called men in it actually has the word all in its name so we are going to challenge you guys challenge the hosts

challenge the future the the future listeners of this podcast to see how many girls and I say girls we can teach this game as early as seven or eight how many girls and women can you bring to the poker table we're going to kick off a competition today over the next month we want to see who can refer the most women to the poker Power Play app in my opinion it's brand new first gender neutral truly gender neutral poker app on the market super easy love all the cameras I'm seeing to get the QR code and to refer the girls and women in your life what's in it for you well I was thinking the hosts could

decide knowing that maybe it's like a laurel piano something or Montclair um maybe it's a buy-in to the WSOP but whatever it is it's my gift to you so not let's not just trade or invest in the market let's make the market Let's Go All In thank you [Applause] [Music] thank you all right join us [Applause] [Music] amazing as a father of three daughters I very much appreciate you making this your passion it's absolutely fantastic we've averaged about 32 33 over the first two conferences about 33 percent female but we had to take a lot of steps to to make that happen scholarships and

just you know Finding women's organizations encourage more people to come um I'm curious just looking at the world largely we've seen a massive change um there are more women getting graduate degrees than men today earnings positions of power it's really changed a lot why do you think it's a little sticky in finance specifically and is there something in what you see it in Venture Capital as well you know we've seen many more check writing females not just window dressing like here's the pr person we're calling them a partner in the Venture firm and that kind of nonsense but I'm curious why it hasn't

happened in finance as quickly as and maybe some other Pursuits and then second question um when you do get women at the poker table and it does click what do you see change in them in terms of you know how they look at the world you can take that in either order yeah I mean it's I I it's fascinating I have to say so um why isn't it happen sooner I'll do that one so what I've learned of course being um a female and a male dominated world for my whole career I also grew up with four brothers so um it's no surprise maybe that I'm there but also like begging to figure out how to solve

the problem I will tell you it squarely comes down to risk-taking so it's and what we don't realize so if in our natural play and hobbies uh typical you know the stereotype how a young girl plays I'm not taking risk and one of the things that we have found and what I see actually helps women at the poker table it's because every hand is a risk of some sort they don't get enough repetition of risk so we don't talk about taking larger risks we actually talked about taking not taking more risk sorry let me step back more risk we talk about taking more risks with an S yeah so we need to get reps in and those reps aren't part of

our upbringing so for someone coming into trading you get a lot of reps right at the at the poker table that's why if we can get these girls playing I'm I'm telling you right the guys are ahead we know this the study's been done first rung on the ladder is where the woman falls behind the guy will take the job with 60 confidence and the next you know the managerial job will come equal out of school and she needs 90 confidence of course she does she hasn't taken risks yeah so we have to get those under there about whatever they look like and by the way they look different for everybody

um and watching what is a risk for your daughter in fact if you guys are up for it for your I think there's nine daughters here two two three three three six four yeah it's like seven yeah and a half seven and a half I think just back in the envelope math yes but but you see how fast I did that for dyslexia that's unbelievable you can't count in simple numbers bro but uh here's the thing yeah we're we're having this discussion I think in 2023 here just even saying there are gender differences innate and then there are um different ways in which girls are raised versus boys it's kind of the

third row but listen it is what it is and um maybe you can talk when you give them that push and they get 10 sessions in 50 sessions in now they played a thousand hands of cards they play two thousand hands of cards what do you see happen to them when they go out into the world what changes in them when they learn to take risks when they learn to Bluff when they learn to re-raise and when they learn to fold when they thought they had a really strong hand but hey that board's textured yep so uh we have we literally get testimonials and there are many senior women who are part in this corporate work we do the senior women are sort of floored and flabbergasted I

can't believe right so I didn't realize I wasn't playing to win would be a very common thing I didn't realize somebody would actually do that yeah right like I didn't actually know everything when I went into that meeting I assumed I did because I'm giving everything of that I know I'm not holding back at all the thought of holding back is not part of the repertoire either it's the giving and giving totally of self so strategy is um unless it's actively discussed right isn't isn't seemingly As Natural um obviously when we have athletes or you know other types of experiences

coming in that tends to change it I think I'll you know I'll give you basic question for a young woman who comes in and she goes into a meeting and she doesn't say anything it's kind of like you folded a hand maybe you folded a few hands we all know we need to fold a lot of hands to win but she doesn't she keeps falling and she keeps folding what is she waiting for because she if she keeps folding we know she's ultimately going to lose if she never speaks up on in a meeting based on Toby we should never have been in the goddamn meeting yeah she's kind of blinded out exactly she'll be gone yeah so at some point she has to take a risk

even if her cards aren't great in that meeting if she wants to anticipate Define risk because for a lot of people in a naive context that haven't looked at probability and statistics and understood that something is unlikely to happen but the payoff you're getting is worth it to take that it's a 30 chance of happening but if it happens you get paid five to one yep so that's a good bet to make yeah and is that the sort of um kind of rubric that that you know folks start to kind of go through to understand what it means to take risk that it's not just about doing something scary or something unlikely jump into anything scary or anything like that because sometimes that risk isn't worth

the payoff and sometimes it is it is both of those things actually so when I talk about teaching poker and the first thing a man will do is say well if you're not playing for real money you're not really playing which is not a true statement um play with your kids for you know pretzels and M M's or marshmallows and see what happens you're playing a real game and you're causing the brain to think differently but we so we start way down on the curve for our women because the whole goal is to create safety and security and learning this game that is male dominated where they feel like

they're going to be judged and so probably it's around Lesson Four so we have a curriculum that they're starting to learn the numbers as well and how do I do it in you know a basic way a quick easy way and then how do I get better and better as I go up the Curve there's a there's a great book written by Annie Duke called thinking in bets yeah um and uh I would encourage all of you to read it because I think Friedberg what you're saying is actually something that a lot of people have which is a little bit of mathematical mathematical illiteracy around probability and probabilistic thinking and it is a very different mindset mindset to think about expected value

why do you make a certain bet some number of times why losing 15 times in a row literally can be okay because over a distribution of 100 times you may actually come out ahead it's a very difficult way to Train Your Mind by the way I think it it's really important in a broader social context so that not everything is right or wrong not everything is I will win this bet or I will lose this bet um it requires a second dimension attached to every decision which is the probability which most people don't do and it's what also makes conversations around things like social policy and politics difficult because people say this is one way or the other but it's

like hey if we do this this way there's a 30 chance it might work if it's a 70 chance it might not but if it does work it's 10 times the return that's worth us doing so we should expect failure but if we succeed it's going to be in an outsized way and if we get to make enough of those sorts of decisions things can move and we get caught up in a lot of our decision making you know um in social policy as well David's a huge feminist uh thinker and I'm curious David you're you're taking all this in right now and I can see the wheels churning your thoughts on

you know in the post-modern feminist world how do you think poker plays into the lunch break by the way I recognize that face I see that yeah compassion in the EQ yeah I haven't learned how to Virtue signal quite as well as YouTube well just try try again [Applause] I think the point you made actually that safety is the opposite of risk is a really interesting point because the the thing that you hear over and over again for example in these debates we have over free speech is uh safetyism we have to make the environment safe space we don't want them to hear arguments they don't like they need the safe space yeah

well you're saying you know I've never bought that as an argument for censorship for example but you're making I think a different argument which I hadn't really appreciated before which is if we don't make people comfortable with risk then they're not going to be successful in these areas and that's another downside of this the grand Eisman of psychological safety yeah when you come to work is a fallacy right I mean this is the worst thing you could do to somebody is to make them psychologically safe the world is not safe right I have a market question I apologize can I just say one thing on that so I literally was at a dinner last week um and there was a man from a very very old

successful firm and he said after too many drinks all the women who come and ask to be partners at our firm they always come with a perfect track record they never have lost money and I was like and you're surprised right right I mean it's it's so backwards that they these extraordinarily successful women feel like that is the journey that has to be had in fact it's the opposite of the journey what we all want them to see is how they have failed how often they failed how how they kept the failure to a minimum so in some ways these are like the highest performers exactly perhaps if they were men I can't no it's not even just it doesn't take more risk no

as an immigrant my first job was on a trading floor and I had an incredible boss who took me aside and taught me the difference between batting average and slugging percentage and that's another concept that's poorly understood because when you're at the bottom looking up you think you have to be perfect that's batting average but when you realize that in baseball the best batter in the history of baseball you know is basically a 400 hitter but that was like once and that's an aberration in the 50s or 60s that'll never happen again you realize okay we're hitting for slugging percentage and that means

implicitly huge error rates yes tons of losses and unless you internalize it and figure out how to manage it you can't make a ton of money I just want to shift the conversation yeah you're an incredible business person you have a vantage point that I find really fascinating and you put on a chart up there where about inventory of options now you're sort of at this really interesting moment Financial vault is kind of like been decimated what does that mean as you look forward based on your pattern recognition of the past where where are we headed into and

knowing where your firm is positioned in all of that yeah so I we're in a an odd place right now I think right it has a.com ask because the AI feel to it but we have the fed maybe is going to raise a little bit more but not inflation may be slowing but it may not we have sector rotation we have a lot of push and pull you're right in the middle and so what is going to snap that one way or another definitely not something our firm tries to make the call on but we're saying it's ready it's ready and it can if a handful of things happen whatever the exogenous events whatever it might be

and we want to be ready and be by the way we might be wrong we'll just waste a bunch of money holding the inventory that's going to rot but um but basically you've done that before basically yeah it's what you're saying massively long ball and you're waiting for something in One Direction or the other yeah it's a good time of the year right we're going to go into the next earning cycle and um um we have to wrap I really appreciate you coming out sharing your story I encourage everyone um uh the the QR code we'll share that and everyone can hopefully download the app and um as girl dads thank you yeah and thank you so much thank you for

doing this I appreciate that I'm gonna let your winner slide Rain Man [Music] [Applause] ice cream [Music]