Bell Curve: Preparing for lift-off

December 26, 2015 01:00 PM

From a young age, Christopher Gersch has had a fascination with airplanes. Growing up in Rolling Meadows, Ill., northwest of Chicago, he had a direct line of sight to O’Hare Airport every day. 

“I would see 747s turn above my house toward their final approach and I would wonder where they had been, where they were going and what it was like to fly for a living.”

A certified pilot with a multi-engine commercial license to fly, he attended the University of Illinois (U of I) on a Navy ROTC scholarship. His goal of flying military jets was on plan during his first year, but then things abruptly changed. “I found out [in my sophomore] year physical that I had an eye issue that prevented me from flying jets. It was heartbreaking.”

Gersch, now a director of Bell Curve Capital in Chicago, pushed aside the disappointment and thought about where he could use his background in physics and mathematics and his Bachelor’s of Science in Aerospace from U of I, where he graduated Magna Cum Laude.

“I was hired as a pilot at Bimini Island Air out of Fort Lauderdale,” he says. “Everything was going as planned until a winter internship at the Chicago Board of Trade (CBOT) my senior year.” Gersch quickly found himself enamored of the markets. 

“When you see someone you’re clerking for making $850,000 in a day, you find yourself excited about new opportunities,” he says. 

“I was lucky enough to get my first job under Tommy DiSanto, one of the most well-respected traders at George Hanley’s commodity trading firm. I was taught how to trade by some of the best traders on the floor. Eventually, they told me to get off the floor and start trading on the screen. So I did.”
Gersch filled paper in the soybean options pit at the CBOT in 2003. In 2004, he became the head trader of Spike Trading’s equity trading division. 

“At Spike, I was focusing more on platform testing and pairs trading in foreign treasury bonds,” Gersch  says. He would trade the the overnight European bond session and stick around to trade various markets during U.S. trading hours. “Trading for a long time was my entire life,” he says. He would eventually become head trader of Spike Stoxx Pair Trading Group. “It was a unique opportunity to bring machine learning tools and filters to Merrill Lynch’s CBOE trading floor operations.”

By 2007, Gersch moved over to BLOX Capital, where he would eventually become a partner. He also became the founder and director of Portfolio Management at Chicago Global Capital, which focuses on trading equities and futures products. In addition, he began investing in a series of companies in the energy, technology and financial sectors. Recently the success of a few of his investment portfolios has been getting more recognition than his trading.

“Good companies you invest in are like good trades, and bad companies, bad trades. You usually know when a trade goes bad, but often traders rationalize why to hold onto their position for a little longer. I was fortunate to get some great companies to invest in and build,” he says. “All great traders/investors/entrepreneurs create hedges throughout their lives. Investing in a business you know makes sense with people you believe in, is the single greatest trade I’ve ever made.”

Today, Gersch is the Director of Strategy at Bell Curve Capital, a position created after a deal with his firm Altimus Capital in early 2015. The company’s strategy centers on machine learning and pattern recognition algorithms, and covers currencies, commodity futures and equity options. 

Gersch also is working as an adjunct professor in the School of Financial Mathematics at the University of Chicago. The program has developed a 10-week course at Gersch’s direction called Applied Algorithmic Trading. In addition to educating prospective traders on the ongoing intersection of trading and technology, he also is a co-advisor for the university’s trading club.

Looking forward to 2016, Gersch is monitoring the Fed. “With an increase in rates, we foresee greater volatility as companies struggle to grow in a higher interest rate environment.”

Gersch says that even a small symbolic increase will create a headwind for the economy. “We’re already beginning to see a bit of slowdown and a widening in spreads, creating volatility. This upcoming volatility is what every trader lives for,” he adds. 

About the Author

Garrett Baldwin is the Managing Editor of the Alpha Pages and the Features Editor of Modern Trader. An author and Baltimore native, he earned a BS in journalism from the Medill School at Northwestern University, an MA in Economic Policy (Security Studies) from The Johns Hopkins University, an MS in Agricultural Economics from Purdue University.