Why Did Thomas Peterffy Think He Could Trade?

David Senra says Thomas Peterffy realized that if Jarecki could figure markets out, so could he. Jarecki was a very well-educated man, but he was a psychiatrist and did not know anything about markets. Over seven years Peterffy watched his boss become known as the dean of the American gold market. Seeing somebody else succeed was the point: if Jarecki had figured it out, Peterffy realized he could too.

Jarecki did not want to expand into options. Peterffy did. Peterffy had used his computer to invent a partial differential equation that priced options from the underlying asset's price, volatility, and time to expiration. He tested the formula quietly inside Jarecki's company on silver options and made money on almost every trade. The profits made Jarecki's refusal more frustrating.