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Becker Private Equity & Business Podcast
Building Prosper Trading Academy, Navigating Market Volatility & Finding Purpose Through Loss with Scott Bauer 4-21-25
00:21:34
In this episode, Scott Bauer, CEO of Prosper Trading Academy, joins Scott Becker to share his evolution from Cboe floor trader to fintech educator and entrepreneur. He also opens up about building a charitable foundation in honor of his late wife,
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- [00:01]
Scott Bauer
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- [00:30]
Scott Becker
This is Scott Becker with the Becker Private Equity and Business Podcast. We're thrilled today to be joined by a brilliant business leader and who's built a fascinating financial business. We're going to talk today to Scott Bauer. Scott said the kind of life, the kind of person that you admire for a whole bunch of different reasons. We'll talk about that as well. As well as being deeply involved in business, he's also been deeply involved in charity and leading some charitable efforts and hopefully we'll get a chance to visit on that as well. Scott, can you take a moment to introduce yourself and tell us a little bit about your business?
- [01:09]
Scott Bauer
Sure, and thanks for having me, Scott. Really appreciate it. So my, my professional career after attending University of Illinois has been in the trading community, trading and education. So I was a trader down on the floor of the CBO Chicago Board Options Exchange a number of years, 20 plus years, wound up building up my own trading firm, went to work for Goldman Sachs and ran their S P500 operation down on the trading floor. And then about 10, 11 years ago, transitioned from the floor to trading on the screens and teaching people how to trade. So we built up a company called Prosper Trading Academy where myself and other professional traders and educators work with students all over the world, live in the markets during market hours, teaching them what to look for, how to put trades on, you know, risk management, everything. And We've got about 17,000 active clients right now. And we trade everything from stocks to options to futures. We fund people to trade as well. And I still get to have a little fun because I am down on the trading floor several days a week doing a bunch of media spots as well. So for people that don't know that there still is real live trade, just like no one's ever seen it, like you may have seen in, you know, trading places, that still happens and I'm in the thick of it.
- [02:42]
Scott Becker
So, so, so tell us. I want to touch on a few quick subjects before, before we keep on going. But first, with the recent volatile economic climate, the tariffs, everything else, does that create more opportunities for traders? Does that create lots of ups and downs? Does that have an impact on the trading world? That that's sort of first. Then I'd love for you to talk a little bit about over the long run, how that trading environment has changed. Because you and I know everybody had started in trading on the floors 30, 40 years ago, at some point moved to electronic, move to different ways. Not everybody, but a lot. And I'd love to talk a little bit about that evolution, but talk about how are things looking today in terms of is there a lot of volatility because of the markets? What do you see?
- [03:28]
Scott Bauer
Sure. So there absolutely is a lot of volatility. And traders we've got to separate and put our trading hat versus our investing hat on. Traders love volatility. We love the opportunity that volatility creates for us. Now at times there can be such extreme volatility that if it persists, and we're almost in one of those times right now, that it can make things for traders difficult again. We embrace volatility. But when you get in a situation like we are now, where the market is moving not necessarily because of technicals or fundamentals, the market is moving on a daily basis because of the next news print that might hit the tape, a tweet, whatever it might be, it absolutely makes things more challenging. There's no question about it. Now, would I prefer volatility over not having volatility? Absolutely. Volatility is there because of the uncertainty and the uncertainty is there right now because of, as you just mentioned, the tariff talk. Nobody knows what is the next shoe to drop or what is going to happen. So we do embrace volatility. It is a good thing, generally, excess volatility. The market functions as it should, but it definitely makes things much more difficult.
- [04:54]
Scott Becker
Fascinating passing and talk about for people that haven't lived this over the last 20, 30, 40 years, the evolution of what trading has was to what it is today and what that looks like. I know the trading desks at the big, big banks, the big firms are crazily busy again. But talk about that, how that environment has changed over the years.
- [05:15]
Scott Bauer
Sure. So, you know, up until let's call it the late 90s, early 2000s, everybody looked at trading as, as floor trading. Right. There were floor traders, different exchanges in Chicago, New York, Philadelphia, out in San Francisco, internationally. And market makers like myself, individuals would have a seat. The right to be on an exchange and trade, whether it was a particular stock or futures, whatever it was. And what happened was with the switch over the advent of electronic trading, that opened up the trading world to many More people, many more institutions, many more firms. And trading size got to the point where the individual, the individual market maker almost got sized out of trading, just couldn't compete anymore. Rather than being on the floor and you know, say I want to trade five of those contracts. Well now those contracts became 50, 500, 5,000. And so what has happened in, in the trading world is the bigger banks, bigger institutions, bigger companies have really taken over the space. And I'm not saying that in a bad way at all. I'm saying that because of the volume and the liquidity that is out there and the interconnectivity of being able to trade a stock option, let's say in Amazon and how that may connect to foreign exchange and how a firm like Goldman Sachs or Citibank might hedge that. So many, many floor traders, many floor traders, I'm sure many that you know, that I know it was really difficult to make that transition from being standing in a live trading pit responding to other market makers, responding to brokers, where that just disappeared. And now everything was in front of us on the computer. So I, I would say that conservatively, 80 plus, maybe even 90 plus percent of the traders that I grew up with and traded with on the floor could not and did not make that transition over to the electronic trading world it talk about.
- [07:33]
Scott Becker
I couldn't agree with that more. I mean so many people that I know that started in their 20s in the, in the sort of floor trading world 20, 30 years ago now ended up out of it. So many people and a small handful kept on trading one way or the other. Talk about your transition from for trader to electronic trader to teacher to business builder. Talk about where that pivot came from and any advice you have to others on those kinds of pivots.
- [08:02]
Scott Bauer
Sure, so, so in the early 2000s when this transition was, was really going through, you know, a major transition, there was what was called a hybrid world. That hybrid world at the time was partial floor trading, partial electronic trading. I honestly wanted nothing to do with the electronic side, just like many, many floor traders. And I was almost forced out quite frankly of, of the floor trading to the electronic world. And fortunately for me, Goldman Sachs reached out to me and said hey, we, we still need floor traders. We need them in the S P500 pit, which in that transition in the mid early 2000s, most of the individual stock option trading, so whether Amazon, Coca Cola, you know, there was no Tesla at the time, but any of the stocks you could think of, those went away from live trading right to the screens but the big indices, they still stayed around. So fortunately I was in a position where I was still able to be on the floor trading live, slugging it out in the pits. In fact, when I went to work for Goldman Sachs, it was right before the great financial crisis in 0708 09. So it was actually a great time to be down there. And I was able to see both sides of the business at that point because I was trading live. But everything that I was doing was being hedged electronically from Goldman Sachs. So fortunately I was able to kind of see that transition in real time. And that really helped bring me to where I am right now because in 2011 I was fired and it was the only time I've been fired in my life. And I was fired because at that point Goldman Sachs says, ah, we don't need any more floor traders worldwide. It wasn't just me. They were eliminating all floor traders worldwide and going exclusively to online or you know, the, the screens. And I'm like, okay, now you know, what am I going to do? I now have the insight to the retail side of trading electronically. I obviously know the floor trading part of it. And at that point, if you go back, you know, 2010, 1112, the thirst for knowledge, for education worldwide was just growing and growing and growing for people and institutions and even big banks to trade in the market. So I saw this niche that I believed, introducing people to the ease of being able to trade options, to the ease of understanding that no options are not necessarily risky. They're not like rolling the dice in Vegas, which many people thought. And so I built this education platform teaching people how to trade and how to trade online. And that started in 2012. And I have built that up Prosper Trading Academy. And like I said earlier, we have about 17, 000 active students and clients who follow along with myself and our other educators here that have, you know, instant access to the market, instant access to professionals, mentoring them, guiding them. And fortunately, I guess for me, I was fired. Most people can't say that, but fortunately that really forced me into doing something like this. And, and you know, I had the foresight when, when the option market was really, really exploding to build a program.
- [11:45]
Scott Becker
Like this and talk for a second about building the program and then building Prosper. We've got something like 17,000 students now. Talk about that and how you scaled that. Just give us a sense of how that happened in the evolution there.
- [12:02]
Scott Bauer
Sure. So I am not a marketing person. So you know, I count on my, my marketing team to, to really, you know, I give them so much credit for going out there and, and really finding that niche and finding the people that wanted to join this. Because if you look now anybody, Scott, you know, you, you look, you go on social media and I, I mean how many ads, how many, you know, posts do you see from trading gurus, right? You know, just they're, they're ad nauseam and it wasn't like that at first. Now that is something that we have to compete with and we have to contend with because I've been doing this for 35 years. I'm on the networks, the major networks every single day. I have a really good reputation, the company has a really good reputation. But at times I'll get lumped into the same as these, you know, one off fly by night, quote unquote trading gurus. So we, we really built up the business very organically because through the mid, you know, teens or so, that's when advertising on social media, advertising through, through Google clicks, advertising through meta, looking at your, your demographics, that's really where things started to build up. And I really believe that my appearances on, on cnbc, Fox Business, Bloomberg, whatever it is, has just really helped my business because it gives me legitimacy, it gives Prosper Trading Academy legitimacy where someone can say, oh, you know what? I just saw that guy interviewed with Jim Cramer, I saw that inter, that guy interviewed with Liz Clayman just now. He must be somewhat legit. So we really built this up organically over time and it just fortunately snowballed and we took advantage of the, the, the want, the need that internationally people wanted to learn this business.
- [14:00]
Scott Becker
Fascinating. And talk about this year, Scott. And then I'm going to ask you a question about charity as well in a second because I've seen your leadership there talk for a second about what you're most focused on and excited about this year.
- [14:12]
Scott Bauer
So right now the market is tough and I'm not just talking about looking at the S&PS, the DOWs, the NASDAQ, the market for marketing and for actually getting people to, to, you know, sign in and log on is very difficult because many business are going through the same struggle right now where their end user doesn't want to spend any money. Right. Everybody's pulling back. Consumers, we know the consumer is pulling back and whether they're pulling back and, and not spending on, on clothing or, or other things, we're going through the same thing right now. So it has been a little bit more difficult marketplace for us right now getting newer clients. I mean we're we're still, you know, we're, we're still chugging along, we're still doing fine. But that has been more difficult and we're looking at different ways to, to not just advertise but give more value so that people that are on the fence making that decision can say, all right, you know what, this is a no brainer, we've got to get to that point. I do believe that the market environment for trading right now is still fantastic. Again, so many people are, are concerned about their IRAs, therefore, you know, 401ks and with absolute, absolute great reason to be concerned. And early on I said we have to separate our trading hat from our investing hat. What I do is not investing. I am not an investment advisor, I am not a broker. I don't give opinions. None of our educators give opinions on what you should do with Money for your IRAs for your retirement accounts. We focus solely on trading and the opportunity for trading is very, very robust right now. It's a challenging market, but yes, that's why you need a mentor. That's why you need someone like us to help guide you through it.
- [16:02]
Scott Becker
You know, fantastic. And just for those that don't know, I will, you know my disclosures. I've known Scott for 40 years. I'm a huge fan of his integrity, his business acumen. So a really, really good guy. Scott, before we go further, can you take a moment and tell people if they want to learn about trading, how could they learn about your company and where, where can they find you?
- [16:23]
Scott Bauer
Sure. So it's really Easy. It's Prosper Trading.com name of the company is Prosper Trading Academy. You can go right to our website, you can Google, you can YouTube us. We have thousands and thousands of educational videos that are online that are free. You know, anybody can, can Google or YouTube how to trade. Right. But you're not necessarily going to find what you want. So if you look for Prosper Trading, we are the real deal. We are here based in Chicago. We are real traders who have been in the trenches, who have done this and we are live in the markets. 8:30-3:00 Central Time every single day while the markets are open, with our students just guiding them along the way.
- [17:12]
Scott Becker
Fantastic. Scott, I'm going to touch on a subject and obviously you'll let us know if you want to cover this in the podcast or not. I'll tee us up and you'll figure out if you're comfortable talking or not. Scott Bauer, for people that don't know Lost his wife, Lori, years and years ago, has done two things incredibly well since then, Built a charity in her honor and would love to talk about this, also rebuilt a family, got married and so forth, and has done a loving, wonderful job there as well. Scott, can you talk about the charitable effort, your inspiration, and are you comfortable doing so?
- [17:50]
Scott Bauer
Absolutely. And yes, because that is me, that. That's part of my life. So as you mentioned, Scott, back in, it was actually right around the time that I was fired by Goldman Sachs. My wife Lori, 43 years old, passed away suddenly, no prior conditions of anything. She had a sudden heart arrhythmia that, you know, obviously shocked our family, shocked friends, the community. I had three boys at the time. They were 16, 14 and 12. We all saw live what happened and, you know, thought that our world was over. And what really came about from this is truly a story, Scott, of turning lemons into lemonade. Through our process of dealing with this and grief, my focus was really just to get help for my kids. And at the time, everywhere I looked, there really wasn't that I found anything that specialized or focused truly on grief. Sure there was. You know, they. They could find someone, a therapist to help them, but nothing that truly focused on grief. So between myself, family, close friends, we built the Lori Bauer foundation for Sudden Loss. And we didn't know at the time what it was going to do. We just know that we wanted to help grieving children. And so since then, this was 2011, 14 years later, we have multiple grief centers in the Chicago area. We have literally helped tens of thousands of grieving children. And that grief comes not just from, you know, the loss of a parent or a sibling. It's loss, divorce, abandonment, incarceration, and the need for what we provide you would not believe is just. It's never ending. It is never ending. And we have been fortunate enough that just like on the business side, where I filled this niche of what people wanted, we have filled this void, this really big void for getting kids help. We help kids ages 2 to 21 on one therapy group sessions. We also underwrite some children's grief camps where over the summers, kids that are in the same situation can get together, have a few days or a week and just be able to be kids and not have to deal with the pressures that have been thrown at them. And it's something that I am really proud of. My kids have embraced. My Kids are now 30, 28 and 26, and they have embraced the foundation, obviously not for the reason that it was started, but for what it does. They are very active in it. And then when I say that, you know, this was a story of turning lemons into lemonade, you know, given the situation here, I could have just gone on and just kind of lived, you know, lived my life doing what I wanted to do. And I was unbelievably fortunate. I mean, you talk about being in the 1%. I was in the 1% because of what happened to me. Unbelievably fortunate to meet the most wonderful person in the world, who is my current wife, Amy, and her three kids. And we. We could actually. We could actually create a movie or write a book on how to build a blended family and how things just can go from a catastrophic situation to turning into, you know, I don't want to say a fairy tale, but turning into a life, that. That is just unbelievable. So I am really, really incredibly blessed. My kids are incredibly blessed. I feel the same about Amy, feel the same about her kids, and just. Yeah, I mean, it's. It's really. It's really the 1%. Because you don't hear stories like this.
- [21:59]
Scott Becker
This. No, it's. It's. It's really a wonderful thing. We, We've watched you. We admire it. Again, thank you, Scott Bower, Prosper Trading Academy, for joining us today on the Becker Private Equity and Business Podcast. What a great pleasure to visit with you. Thank you very, very much.
- [22:18]
Scott Bauer
I really appreciate the time, Scott.