Andy Redleaf is the Founding Partner of Whitebox Advisors, a $5.5 billion multi-strategy hedge fund launched in 1999 with primary offices in the metropolitan hubs of Minneapolis, Austin, and Sydney, Australia. Before founding Whitebox, Andy spent twenty years trading options, for two years at Gruntal & Comes mpany alongside Stevie Cohen, fourteen on the CBOE, and five as a Founding Partner at Deephaven Capital Management. He has an irrepressibly creative mind and, alongside his partners, writes one of my favorite manager letters.  Our conversation covers Andy's nuanced view of the evolution of trading markets and financial instruments over his forty-year career, including arbitrage trading in the 1970s and 80s, unintended consequences of the deregulation of trading commissions, segmentation of market participants, importance of liability management, growth of orphaned securities, and the pending shift from decentralized to centralized market systems over the coming years.   Learn More Join Ted's mailing list at CapitalAllocatorsPodcast.com Write a review on iTunes Follow Ted on twitter at @tseides For more episodes go to CapitalAllocatorsPodcast.com/Podcast   Show Notes 1:52 – Andy’s background and the founding of Whitebox 5:34 – The math of options in the late 70’s, early 80s  13:44 - The decentralization of markets 16:34 -  Andy’s transition into trading other strategies 18:31 – The launch of Whitebox 20:08 – The meaning of the firm name Whitebox 23:38 – An example of a transitioning security from one group of investors to another 28:31 – Has it gotten harder to find arbitrage opportunities 32:29 – The driver of the financial crisis 32:44 – Gary Gorton, Misunderstanding Financial Crises: Why Don't We See Them Coming 34:28 – His purchase of a bank 38:17 – How he got involved in the structured credit markets 42:39 – What is that Whitebox does differently from others 47:14 – Principles that guide the investment activities he likes to take part in 50:03 – How will the financial system evolve over the next 10 years 55:29 – Closing questions