Sundheim: D1 Capital does not use derivatives due to timeframe risk
Dan Sundheim · Dan Sundheim of D1 Capital on the art of public market investing · Oct 22, 2025 · at 39:56
Dan Sundheim, founder of D1 Capital, explains why his fund avoids options and derivatives in favor of trading underlying equities.
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“I don't use, I really don't use derivatives at all. The problem with derivatives is like, look, At the end of the day, when you break down, what is a derivative? It's just leverage and implied volatility. Like, if I want leverage, I can go, you know, get leverage from a prime broker. I don't have any view on implied volatility, and the problem with derivatives is, there's typically a timeframe. I'm not good at timeframes. I don't know when a stock is going to work, or, that's very difficult. So, I don't like having something that making a bet that something's going to happen in a certain period of time. I just, so we keep it pretty simple and just trade underlying stocks.”
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