ET pollâs result is very close/in sync with industry norms when its comes to economicsâ surveyâ¦a coin flip , errr , 50/50. LOL
You donât ever see 100 doctors looking at the same patient and 50 say âstrong as a bullâ and the other 50 âhe is going to die tomorrowâ , do you ?
You should be very careful trading HV/IV alphas ( short or long) . Besides , how did you got 60-70% of accuracy ? you can have overall losses if only ONE stock out of ten ( when shorting) moves big against you , while still maintaining 90% of "accuracy"
Good luck
I think that many quantâs models did not factored the power of forced redemption. IOW , many of the âVâ shape positions were liquidated at the lowest point of PnL curve.
I wonder how many short vega and gamma traders agreed with you back on 8/16 around 3.15 pm...right before rate cut's rumors saved them from beeing wiped out for ever.
as chugani already said , long straddles/strangles benefits from rise in volatility. You also must have an alpha type HV/IV ratio to pay for time decay by scalping.
MTE , thanks - yes , this is for long stocks only.
PT , thanks - so I am back to correl between stocks again ?....damn.
Anyway , I attached excel file just in case if someone have free time and want to help me out.
All , thanks again for your help !
so if portfolio of 100k trades with annual volatility of 30 than "One day VaR with 99% of confidence " is :
(30/16 (square root of 256) * 2.33 )*100,000=4380 $ ?
OK...here where I am so far : at this point I am looking at very simple output like : "One day VaR with 99% of confidence is XXXXX $..."
the inputs/steps are :
1. Calculating Annual vols per every stock ( using 20d MA) .
2. Assigning $ weight ( # shares , cost) to get combined annual vols...
what was the reason to make such a complex product ? Why not keep it simple like stock at nominal X trading under vols of Y ? It would be like an owner of the business saying " I will come up with the product that only 5% of my existing customers can understand (hence , buy from me)...because I...