During academic study at Milan’s Bocconi University, Corvino began experimenting with systematic and quantitative tools and analysis: particularly fundamentals and most importantly when they disconnect. This spurred early investments in the heat of the TMT bubble in 1999, to test hypotheses rather than speculate. “That confirmed my belief that markets reward discipline, adaptability and pattern recognition, and that a contrarian view should be taken against fully discounted markets. Then trading and managing capital felt less like a career choice and more like a natural extension of longstanding curiosity and intellectual precision,” explains Corvino.
Corvino jumped in at the deep end the day after graduating and began managing funds at BCC Risparmio e Previdenza, running around EUR 600 million split between a dedicated fund (EUR 60 MLN) and the TMT sleeves of EUR 6-8 billion in global equity funds. To become a fund manager in his twenties, straight after graduating, was extraordinary, notwithstanding his outstanding, near perfect 110/110 cum laude graduation score at Bocconi (his final dissertation was on market timing horizon and performance on S&P 500).
The first seven years of Corvino’s career saw him work for two other companies, Aletti-Gestielle (now Anima) and MPS Banca Monte dei Paschi, where he learned a great deal from some very senior mentors inside the firms, as well as some others in his growing network in the wider industry in hedge funds and sovereign wealth funds.
Hedge fund giants
Corvino was particularly inspired by three legendary macro hedge fund managers in different ways. “George Soros’ concept of reflexivity highlights how human biases and perceptions can shape – and sometimes distort – market fundamentals, creating self-reinforcing cycles. Ray Dalio’s view of the economy as a machine, built on predictable debt and productivity dynamics, together with his disciplined principles and data-driven transparency, provides an invaluable model for systematic thinking. Paul Tudor Jones, on the other hand, combines intuition and technical pattern recognition with strong risk discipline, demonstrating the importance of timing, momentum and capital preservation,” points out Corvino.
These influences, blended with his own personal experience, temperament and market exposure, have shaped his own approach: “I emphasize the importance of real-time feedback and intuition, and the willingness to accept temporary drawdowns in pursuit of outsized, asymmetric returns,” says Corvino.
Conceiving a distinctive strategy
Corvino created his unique equity hedge fund strategy, which combines single name US equities, linked to proprietary single stock derivative structures and US equity index futures and options. The typical annual performance attribution split has been 40% single stock alpha, 40% carry from associated single stock option structures, and 20% from e-mini-index relative value trading, though this does move around.
The strategy can profit during bull, bear and rangebound markets, and has a wide and dynamic range of linear and non-linear risk and return exposures, which aim to maintain positive carry and convexity.
Finding a seeder
Corvino joined Zest (now LFG + ZEST) in 2015, and his strategy is the largest one in terms of assets under management, thanks to his ability to secure commitments from a broad base of institutional investors and family offices. LFG + ZEST is part of LFG Holding, which now manages almost USD 3 billion, making them one of the largest independent wealth managers in Switzerland.
The core qualities of combining carry and convexity have remained constant, but the strategy has been honed and refined in response to developments including ODTE options, interest rate normalization, social media, AI and alterative data, and the rise of passive investing including ETFs.
The growing versatility of shorter dated options
Corvino did not start his career shouting and screaming in the pit but began trading electronic listed options always on Bloomberg terminals. The increasing frequency of options has been helpful. “When I started, I only traded weekly options on a Friday; then Monday and Wednesday were added, and then daily. Weekly and ODTE have become an important part of the strategy. Initially they were on the S&P 500 but later the Nasdaq 100 and Russell 2000 were added,” recalls Corvino.
The most obvious benefit for ODTE options simply arises from non-linear time decay that accelerates as they approach maturity, but they also provide other more nuanced advantages: “They can provide more layering and precision. Layering over various expiries allows for more precise exposure management, enhanced yield and an asymmetric profile,” explains Corvino.
A core aspect of the current strategy involves extensive use of ODTE options on E-mini futures and weekly options on single names, and these support Corvino’s agile and nimble style of trading. “These instruments are exceptionally well-suited to a wide spectrum of objectives, allowing risk to be fine-tuned or amplified across different timeframes as market conditions evolve. The ability to target exposures for as little as a few hours – or just a single trading day – means portfolio positioning can be highly dynamic, responding rapidly to intraday catalysts, event risk and short-term dislocations, without committing excessive capital or risking outsized overnight moves,” explains Corvino.
These options also support greater customisation of risk management and payoff profiles. ODTE and weekly options contribute directly to performance, flexibility and risk management by making it possible to implement highly tailored trades. “They enable precise hedging of delta and gamma, tactically monetize sharp volatility spikes, and repeatedly harvest premium through structured short-volatility overlays with well-defined risk. The non-linear nature of time decay, particularly apparent in same-day expiry contracts, opens up recurrent opportunities to earn carry while dynamically resetting risk. This provides the dual benefit of enhancing returns in quiet regimes and offering protection or profit potential during sudden price swings, something particularly valuable in today’s fast-moving, headline-driven markets,” explains Corvino.
These options contribute towards the enduring hallmark of Corvino’s style: combining carry and convexity to enhance resilience.
“These short-term options, when deployed intelligently, are invaluable for generating returns, engineering flexibility, and actively managing portfolio risk in a market shaped by both rapid information cycles and shifting monetary policy,” sums up Corvino.
Interest rate normalization
The strategy has also adapted to the higher interest rates since 2022. “The normalization of interest rates to more historically typical ranges has made implied forward prices embedded in option structures a relevant variable. This affects both the relative attractiveness of certain spread trades and the pricing of calendar and diagonal strategies,” points out Corvino. This can feed into both the initial construction of strategies and their ongoing rebalancing.
“With forward curves now reflecting meaningful carry differentials, there are new opportunities to exploit mispricings between spot and forward-dated options, both in outright positioning and in the management of overlays. Using ODTE and weekly instruments in this context provides a versatile toolkit to navigate evolving rate environments, allowing continual adjustment of risk/reward and extraction of alpha from the rate-volatility interplay,” explains Corvino.
Alternative data and AI
Alternative data and AI have increasingly become inputs into the process. “Real-time data, driven by alternative sources and AI-powered analytics, has become central, enabling faster reactions to news, sentiment and transactional patterns that can reveal inflection points or sustain trends well before they surface in traditional metrics. This expands the analytical toolkit beyond classical financial statement analysis to include inputs such as social sentiment, geolocation and supply-chain intelligence, allowing for more nuanced positioning relative to both consensus and crowded trades,” explains Corvino.
Social media shenanigans
Social media is one form of alternative data that Corvino closely monitors, along with news analytics, to flag potential volatility catalysts, proactively adjusting hedges and overlays: “The aim is also to understand how quickly these events are absorbed by the market, so we can provide liquidity or take contrarian positions when dislocations are overdone”.
Passive investing, indices, ETFs and MAG7
The explosive rise of passive investing via index funds and ETFs has also led Corvino to adapt his approach and he will sometimes pragmatically downplay the role of fundamentals: “This has dramatically intensified market concentration, channeling capital toward a shrinking cohort of mega-cap stocks. This amplifies idiosyncratic risk: the largest constituents now drive much of both index and factor performance, making price movements increasingly a function of flows, liquidity and benchmark effects, rather than company fundamentals. As a result, diversification benefits have eroded, with passive baskets reinforcing correlations among index heavyweights, while sidelining smaller-cap opportunities”.
The evolving profile of antagonist stocks
Corvino avoids mega caps and very carefully selects 45-60 US large and mid-cap stocks sized around 1-2% of NAV as one driver of returns. He does not use market cap weighted indices as a benchmark for his own portfolio construction but rather has defined a proprietary concept of “antagonist stocks”, which are defined as, “Negatively correlated pairs that align with a contrarian investment view, supported by both value and quality factors. Traditionally, these stocks serve as natural hedges to high-beta, growth-driven equities, such as tech, which tend to dominate US markets,” says Corvino.
They tend to be found in classic defensive sectors, utilities, consumer staples and healthcare known for stable demand, predictable earnings and consistent dividends. These sectors and some conglomerates are archetypes for quality and value, exhibiting low volatility and strong balance sheets, which underpin their negative correlation to cyclical or momentum-driven stocks and play an important role in portfolio construction.
Semiconductors: secular or cyclicals?
Some growth-oriented equity managers would argue that semiconductor stocks are now a defensive growth sector, but Corvino has a more nuanced view. He recognizes that, “Groundbreaking innovation in AI, cloud and chip design has broadened end markets and made the semiconductor growth trajectory rebase at steeper and more durable levels than in former cycles, but it is not a totally secular growth story. Semiconductors remain inherently cyclical due to their capital intensity, inventory dynamics, and sensitivity to macroeconomic conditions, and this demands disciplined risk management and precise market timing”.
A US-centric strategy
Corvino works in Italian-speaking Switzerland but has not applied the strategy to European equities because it depends on the size, liquidity and sophistication of US equity and derivatives markets. “The US equity market, while arguably overvalued at times, offers unique advantages that suit our strategy exceptionally well, allowing us to generate returns not only on the upside but also through tactical positioning on the downside. The depth and breadth of underlying securities, combined with the availability of sophisticated derivative overlays and unparalleled liquidity, create a highly efficient and adaptable trading environment. These market characteristics enable precise risk management, rapid execution and strategy scalability, which are harder to replicate elsewhere,” explains Corvino.
Liquid and scalable
The strategy could easily run several billion dollars without diminishing returns. “This is thanks to liquid options markets on single stocks and indices, providing sufficient depth to deploy capital effectively and maintain tight bid-ask spreads and good execution quality,” sums up Corvino.
