Borish challenges the belief that prohibiting short sales stabilizes financial stocks. He argues that the 2008 ban forced widespread covering near expiration, removed natural future buyers and market makers, and contributed to extreme price ranges and impaired liquidity.

Short sellers become buyers when they cover.
The 2008 ban triggered forced covering near expiration.
Removing shorts also removed part of the market-making function.
Reduced liquidity allowed prices to seek much lower natural levels.
Limits on manipulation differ from blanket bans on short selling.

“but then you got rid of the market maker.”
Peter Borish · 32:58

“That's going to eliminate a lot of liquidity, right, and then the market's going to find its own natural level, which at that point was…”
Peter Borish · 33:05

#short selling#2008 crisis#liquidity#financial stocks

Explainer· 3

Explainer27:23

What the Brady Commission Changed After Black Monday

Borish explains that the Brady Commission recognized that equities, futures, and options were linked rather than isolated markets. Its work helped produce joint regulatory coordination and circuit breakers that pause extreme moves so participants can assess liquidity and emotion.

Tudor supplied market-break data used in the report.
The crash demonstrated that major markets were interconnected.
The response involved Treasury, CFTC, and SEC coordination.
Circuit breakers create a timeout rather than determine fair value.
Price limits can briefly attract trading as a threshold approaches.

“And the real conclusion.”
Peter Borish · 28:26

“Of that is where we are today, that all these markets are linked.”
Peter Borish · 28:28

#brady commission#circuit breakers#market structure#regulation

Explainer30:43

Why Arbitrage Is Essential to Liquid Markets

Index futures and underlying stocks are connected through arbitrage, allowing market makers to buy one side and sell the other. Borish argues that investors, speculators, hedgers, market makers, and arbitrageurs all contribute distinct forms of liquidity.

Futures can hedge baskets of underlying stocks.
Traders can express relative views through an index and selected constituents.
Arbitrage links prices across instruments.
Healthy markets require participants with different motives.
Market makers and arbitrageurs tighten spreads and support two-sided liquidity.

“They're completely interrelated because the key for liquidity is the ability to arbitrage.”
Peter Borish · 30:43

“you need market makers and arbitragers to tighten the market up so that there's plenty of liquidity on both sides of it.”
Peter Borish · 31:29

#arbitrage#liquidity#futures#market structure

Explainer59:04

How Math for America Keeps Strong Teachers in Public Schools

Math for America seeks to retain excellent math and science teachers by building a professional community and paying stipends. Teachers learn from one another, carry practices back to their schools, and can raise the performance of colleagues and students beyond the fellowship itself.

The model begins with the link between strong teachers and student outcomes.
Teachers face competing career opportunities outside public schools.
A community of master teachers supports peer learning.
Stipends create a financial incentive to remain in schools.
Participants spread knowledge to non-participating colleagues.

“We've established a community of master math science teachers where they can come together and learn and teach.”
Peter Borish · 59:44

“And also we provide them a stipend, so there's an incentive for them to stay in their schools.”
Peter Borish · 59:57

#math for america#teachers#public schools#education

Story· 3

Story12:43

How Tudor Built the Model That Anticipated the 1987 Crash

Borish recounts how Tudor Investments manually collected historical data and modeled the post-1921 market against the rally that began in 1982. The original timing was imperfect, but the historical analog, weakening technicals, and global fundamentals converged before the crash.

Tudor hired interns to enter historical data manually.
The team checked entries with charts because typos were common.
The model compared the post-1921 period with the market after 1982.
Technical and fundamental evidence converged by autumn 1987.

“And we started being very early on collecting real time data and also modeling.”
Peter Borish · 13:11

“But then the technicals came together with the fundamentals”
Peter Borish · 15:00

#1987 crash#historical analogs#market data#tudor investments

Story19:49

Why Tudor Waited Until Tuesday to Cover Its Crash Shorts

Drawing on corrections in 1986, Tudor expected selling to continue the morning after the major down day. The firm waited through Black Monday, covered shorts as a buyer on Tuesday, and also bought fixed-income futures in anticipation of aggressive Federal Reserve liquidity.

Earlier corrections had continued into Tuesday.
A short seller becomes a natural buyer when covering.
Tudor waited rather than covering during Monday’s panic.
The firm bought fixed-income futures across the curve.
The trade anticipated aggressive Fed liquidity support.

“So we waited and we were.”
Peter Borish · 20:41

“Patient, and we were one of the buyers on that Tuesday the twentieth”
Peter Borish · 20:43

#black monday#short selling#federal reserve#fixed income

Story51:23

How the 1987 Crash Inspired the Robin Hood Foundation

Tudor’s gains during the crash were accompanied by concern that an economic downturn would hurt New York’s poorest residents first. The resulting Robin Hood Foundation began modestly and adopted two donor-facing rules: deploy donations within twelve months and have the board pay overhead so donated dollars directly fund programs.

The foundation emerged from concern about the crash’s social consequences.
It distributed $65,000 in its first year.
Annual giving later grew to about $130 million.
Donations are deployed within twelve months.
Board members cover overhead costs.

“when things go bad, it's those at the bottom that get hurt first.”
Peter Borish · 52:19

“One is if you give us a dollar, we're going to put it out the door in the next twelve months.”
Peter Borish · 53:14

#robin hood foundation#philanthropy#new york#1987 crash

Q&A· 1

Q&A1:04:37

Borish’s Advice for Aspiring Traders: Try, Test, Then Pivot

Borish compares professional trading with elite sports: aspiring traders should pay their dues and genuinely try, but recognize that success is statistically rare. They should pivot if evidence of ability does not emerge and differentiate themselves through original analytical work rather than repackaging widely available news.

Professional trading has a low probability of success.
Young entrants should still pursue a real test of their ability.
Remaining indefinitely in the minor leagues is not a strategy.
Original research creates more value than summarizing public news.
Analytical independence is essential.

“You have to be willing to pay your dues.”
Peter Borish · 1:04:48

“Do your own work, and you really need to be analytical.”
Peter Borish · 1:05:53

#trading careers#career advice#original research#hedge funds

Tool· 1

Tool44:01

Borish’s Summer-Winter Natural Gas Spread

After warm weather created excess storage and pressured winter gas prices, Borish saw possible reversal risk from a hot summer and higher cooling demand. His expression was to buy summer natural gas while partially hedging the position by shorting the following winter.

Natural gas had made a dramatic round trip in price.
Warm winter weather left excess storage.
A hot summer could increase gas-fired cooling demand.
The proposed trade bought summer exposure.
Short winter contracts partially hedged the directional position.

“this again becomes listen to the markets, don't listen to the gossip.”
Peter Borish · 44:31

“So we're sitting there trying to put a position on sort of spreading summer natural gas and hedging it a little bit by being short…”
Peter Borish · 45:35

#natural gas#energy#spread trade#seasonality

Takeaway· 2

Takeaway33:48

How Silicon Valley Bank Shifted From Hedging to Speculation

Borish views the 2023 regional-bank failures as primarily management failures rather than a fully systemic event. Silicon Valley Bank faced unusual deposit dynamics and interest-rate exposure, then removed profitable hedges and effectively shifted from managing duration risk to speculating on rates.

SVB received large inflows tied to venture-capital funding.
Those deposits were naturally vulnerable to withdrawal as startups invested cash.
The bank lacked adequate risk management during a Fed hiking cycle.
Removing duration hedges converted a risk-control decision into a market bet.
Anchoring to historically low rates was a major risk-management error.

“But then they move from hedgeres to speculators, right, and if that's not your professional job, that becomes extraordinarily challenging.”
Peter Borish · 34:53

“people anchor to sort of the high or the low, so they assume it's going back there. That's a big risk management mistake to make…”
Peter Borish · 35:41

#silicon valley bank#regional banks#interest rates#hedging

Takeaway1:06:23

A Great Track Record Is Not Enough to Build a Fund

Reflecting on launching his own CTA, Borish says he underestimated fundraising, compliance, and the broader work of operating an investment business. Performance may be necessary, but capital does not automatically arrive; a fund also needs a deliberate organizational and commercial process.

Tudor seeded Borish’s CTA after he left the firm.
Running the business required more than research and trading.
Fundraising and compliance were major underestimated responsibilities.
A strong record does not automatically attract capital.
Operational capability can create organizational alpha.

“I wish I knew how difficult it would be running my own CTA.”
Peter Borish · 1:06:41

“This isn't field the dreams. If you build it, they don't come.”
Peter Borish · 1:07:07

#fund management#cta#fundraising#organizational alpha

Frameworks in this episode

Discipline Before Vision

Fundamental-Technical Intersection

Mobility Outcome Measurement

Post-Loss Trader Review

Strategy-Relative Trader Due Diligence

Insights & moments

⚡Myth Buster· 1

Why Banning Shorts Can Make a Crisis Worse

✶Explainer· 3