Michael Khouw is a CNBC Contributor. Former: Senior Managing Director at CRT Capital, Partner at Cantor Fitzgerald, Member American Stock Exchange, Philadelphia Stock Exchange and New York Mercantile Exchange. Co-Author of "The Options Edge" Wiley, 2016. 25+ year Wall Street Veteran with extensive experience in equity, ETF/ETP, index, commodity futures and options trading.

Contributor and Trader on "Options Action" a financial news program that focuses on equity options. Premiered January 16, 2009; hosted by Melissa Lee.

Optimize Advisors, LLC is a registered investment advisor, registered with the Securities and Exchange Commission (SEC), headquartered in New York City. Optimize Advisors utilizes proprietary patent-pending algorithms and powerful cluster-computing to identify superior investment strategies.

As one of the first institutional users of Dash, and a student of and frequent speaker on options market structure issues, I was hired by Dash Founder, Scott Goldfarb to raise the firm's profile and awareness for the firm's novel institutional electronic brokerage product the purpose of which was to calculate and optimize electronic options order flow routing in real-time to account for all fees, rebates, commissions and PFoF while offering transparency in a TCA dashboard. Among my responsibilities as Chief Strategist was to aid in the design of "smart crossing" algorithms, building on the work of the interactive IOI/RFQ message scraping to FIX functionality we built into "Cantor First". I worked directly advising then CTO, Peter Maragos on that project.Ultimately the Founder (and largest shareholder) was overthrown from the company he created, and many of those he hired directly were steadily excommunicated. His history as the firm's creator has largely been erased, and the firm has since expanded through acquisition and new business lines.

Head of Equity Derivatives Sales & TradingCRT Capital, freshly recapitalized post-GFC by Aquiline, had ambitions to build what I had previously created at Cantor Fitzgerald, a proper, capital committing institutional options trading and strategy desk as an adjunct to a large fixed-income business and a nascent equity sales & trading desk. A portion of the capital for these business ambitions was to come from an anticipated debt offering that would follow on CRT's approval as a Primary Dealer. These efforts were suspended shortly after the collapse of MF Global, (formerly known as Man Financial) collapsed, thus hobbling the firm's expansion efforts.The firm nevertheless employed outstanding credit analysts and with the help of those examining American Airlines bankruptcy, we identified a significant arbitrage opportunity. Unfortunately without the trading capital to deploy we were encouraged to sell the idea on an agency basis. Due to the nature of the double and single-dip claims, there was optionality offered to AMR shareholders in the merger with US Air that effectively represented 4 tranches of embedded Asian options that were grossly underpriced in the stock trading in bankruptcy, which proved to be a 35-bagger in a short time frame. We managed to facilitate/broker a statistical vol-arb play on the trade using euro-style Flexes before I left to join a fintech startup Dash.

Panelist - "Beyond the Buy-Write". Presentation discussed several of the drivers of volatility, and how to view options prices and what they imply.

Keynote speaker and educator

Speaker/Panelist - 30th Annual Options Industry Conference, a preeminent event for derivatives professionals, held in conjunction with the Wealth Advisors Forum.The inaugural forum was held in New Orleans in 2012, and will be held this year at the Terranea Resort in Rancho Palos Verdes May 12th and 13th.

CNBC's Mike Khouw and Joe Kinahan covered today's market, starting with a broad overview of their respective global macroeconomic perspectives as well as drilling down to discuss various trading strategies using futures, options, and stocks.

Started and Built Cantor Fitzgerald's Institutional Options Trading Desk.Liquidity - Desk committed capital and would make markets in US listed options on over 1,000 underlying instruments on the wire, as well as bespoke OTC derivative products. The desk also provided agency trading for US and International listed Futures, Equity and Index Options.Technology - fully integrated options into the US Equities trading platform, full cross-asset product offering with cutting-edge algorithms and a comprehensive liquidity network servicing over 100 sales-traders servicing over 1,500 institutional accounts in the US.Risk - Trading desk maintained very low VaR (sub 2mm, 95%), and recorded only one negative quarter over a 5 year period from FY2007 to FY2011.Value Add - Pre and Post trade consultation for sales, sales-traders and customers, as well as regular market color and commentary and trade ideas.Most fascinating trades - 1) proving that even at this time sometimes the $20 bill on the sidewalk is real, we identified a partial capital structure, positive carry arbitrage between Earthlink equity/long-dated options and bonds. 2) we were approached by Facebook insiders prior to the IPO seeking to hedge (interesting story about potential structures) 3) we were approached by the founder of a large, publicly traded company to structure a creative, low-cost $1B financing facility as a kick-off for a potential proxy fight that included some life/business lessons.

One of four experienced market participants discussing products that have been developed to hedge market "beta" risk exposure, managing the "alpha" outperformance component of an asset's return, specifically the introduction of options on the excess return of an underlying security relative to a benchmark. The Symposium began with an introduction to Alpha Index options by one of their designers, Robert Whaley followed by two panels of experts, who explored the role of this new investment and risk management product from the perspective of practitioners on the "Street" and from the viewpoint of academics in the "Ivory Tower."

Informative half-day seminar discussing how I got my start in the options industry, how the listed options markets work, where this growing industry is headed, and if a career in options is in your future.

Conference to discuss the performance of the major exchanges trading options on equities, equity indexes, debt instruments, currencies and commodities as well as the performance of the clearing organizations during the credit crisis. ABOUT THE WFE:The World Federation of Exchanges is the trade association for the operators of regulated financial exchanges. With 52 members from around the globe, the WFE develops and promotes standards in markets, supporting reform in the regulation of OTC derivatives markets, international cooperation and coordination among regulators. WFE stock exchanges are home to over 45,000 listed companies (as of December 2009).

Presented on the utility of examining anomalous trading activity, particularly in the listed single-stock options market, for the purpose of identifying potential trading opportunities associated with assymetric information among market participants.

Panelist at the annual Options Industry Conference in Weston, Florida, discussing market structure, dark & grey pools and algorithmic trading.Presentation aimed to educate investors and their financial advisors about the benefits and risks of exchange-traded equity options.One of four experienced options market professionals seeking to provide valuable insight on the challenges and successes that individual investors encounter when trading options, the impact of changing market structure, participants and regulation.OIC was formed in 1992, and its sponsors include BATS Options, the Boston Options Exchange, the Chicago Board Options Exchange, the International Securities Exchange, NASDAQ OMX PHLX, NASDAQ Options Market, NYSE Amex, NYSE Arca and The Options Clearing Corporation. These organizations seek to provide a financially sound and efficient marketplace where investors can hedge investment risk and find new opportunities for profiting from market participation.

Participated on a 6 person panel discussing the implications of ATS, grey and dark pools, electronic trading platforms and liquidity in US listed equity options.Algorithmic offerings from both independent brokers as well as those from the larger institutional brokers and wirehouses were discussed. Additionally the potential migration to a process more similar to that seen in equities was discussed including the impacts of payment for order flow, options block trading, IOI's and other mechanisms.

Speaker, industry representative

Worked directly for a Portfolio Manager screening and valuing potential investment opportunities employing a research-intensive, fundamental value-based investment process.The investment strategy objective sought to deliver superior, risk-adjusted returns with low correlation to market indices, while protecting capital in all market conditions which the firm achieved by:(i) emphasizing superior security selection over broad market exposure(ii) actively managing the spread risk, or correlation risk, between its long and short books, and (iii) developing processes and systems to optimize its investment process.

Member of the New York Mercantile Exchange. Floor based proprietary natural gas options trader.Bluefin Trading was founded by Mike Goodwin after he left as head of derivs trading at Morgan Stanley. He began his career working for Jeff Yaz at SIG one of the most successful proprietary derivatives trading firms of all time. At the time I joined the firm along with several of my Gateway Partners colleagues, Bluefin was still new and sought to expand into commodities and options on the NYMEX. Along with colleagues Shawn Gorman and Jim Michels, we started making markets in WTI options and HH Nat Gas Options. As we did at Gateway Partners, once again we were among the first to employ wireless handhelds in an open-outcry pit, although this time testing several off-the-shelf options pricing models/tools and ultimately experimenting with software then still in development by fellow pit-trader David Wender. The product, of which we, along with David himself, were among the first beta users was the foundational product of FinTech company WhenTech LLC, subsequently acquired by ICE. I also was the head of Bluefin's Options Trader Training Program. The energy options trading p&l got off to a slow start, but a key mispricing was identified in crude options. That trade took several years to play out, by which time I had already moved on to Ivory Capital in Los Angeles, but was arguably one of the most successful trades in crude options market-making history. An interesting trade and an interesting story too lengthy to describe here.

Proprietary Commodities Options trader

Statistical Volatility Arbitrage and Market-Making.Primary regulatory function - Gateway Partners was a proprietary trading firm with memberships on all US listed options exchanges at the time. The firm employed market-makers on the Cboe and Pacific Coast Exchange, and specialists and market-makers on the PHLX and AMEX exchanges. Gateway Partners was one of the first proprietary trading firms to employ connected handhelds running proprietary options pricing and risk management software, and among the first to take advantage of systematic volatility (mis)pricing opportunities between index, etf and single-stock options at scale during the open-outcry era. Prior to the advent of ETFs and ETF options I made markets in the cash-settled sector index options on the PHLX, specifically the Oil Service Index, seeking to exploit mispricing between the options on the index constituents and the index options.As ETFs entered the frame our principal strategy was what is now commonly referred to as a "dispersion strategy", effectively short correlation. Net long gamma/long vol in index constituents (primarily the Nasdaq 100) and short QQQ vol against it. While the concept is elegantly simple, implementing the strategy included both logistical/operational challenges as well as business challenges. Several firms vied for "flow" to execute the trade as rules then in effect made transacting with competing market-makers challenging.Competition for flow was fierce, and Gateway was among the first proprietary trading firms to aggressively bid for options-order flow, even receiving "honorable mention" in an SEC letter as they began to examine the market implications of the practice, a debate which rages to this day.Gateway Partners achieved astonishing investment results returning 70% ROE in 1998, 140% in 1999 and 560% in 2000. The firm's operations were severely disrupted 9/11/01 and the operation was sold to KGC at year's end.

Options Market Maker & Specialist