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Depends. When I was a bank trader, we tried to isolate the risk we held in positions, so that we were only exposed to things we wanted to be. However, there are times when you can profit off a move. A good example is NFP or other report, where the initial reaction is very noisy, and you can...

I recommend diversifying across themes. E.g. you may have a long housing market trade, a short oil trade, and such.

Deep buy super OTM puts that misprice IV. If you spend 5k per month on this trade, most months you will lose money, but some months you'll make 10x. At the end of the year, your capital cost (say 60k) vs. your total gain (50k as in the example) balance out. So it's not enough to just find good...

What’s your time horizon? You should have drivers for your view on any stock that will help you establish a view. Once the view changes, exit. Diversification needs to reduce correlation. Can be done with 5-15 stocks if you watch portfolio covariance and correlations closely.

Depends how large your order is as a % of daily average volume. If it’s large, you’ll need to exit slowly over sometime (lots of risk), though there techniques to use (using derivatives and swaps). Most PMs on the street will have a decision price and seek to offload risk to their trader, who...

Here's a primer to help you navigate this: show.cgi (uvt.nl)

The framework you want to start with is that the market SHOULD be efficient. If it SHOULD be efficient and isn't, then you can decompose returns and analyze them more effectively. this is how we come up with risk premias like "momentum" and "value", etc. These are separate return drivers in...

Not providing investment advice. Just my own thoughts. We're in a synchronized early cycle regime. There could be a major blowup/scare, but unless the vaccine rollout is severely hampered then I don't see a crash as imminent. Will there be cooldowns and the potential for a correction? Yes. So...

You need to be doing both.

Good question. I think the biggest impact is a decrease in volatility, which should decrease the estimation error residual, making markets more efficient and reducing the value of "valuation signals" as market prices more accurately reflect fundamentals.

From a thematic standpoint, are you following any of these views: - That real rates will rise, pushing down growth stocks - The cyclical recovery will rally smallcaps, energy, and "low growth" (read: value) industries - DXY will continue to decline -- though has the biggest risk as the Fed was...

Do you just parrot random things statements like that? Can you back up your assertion? I don't think you know what you're talking about.

Why do you feel the need to insult Democrats lol? Like what satisfaction do you get from typing out "DemoCrap"? Also, do you not respect a balance between different strains of liberalism? Both democrats and republicans come from the same philosophical underpinnings. Things you might despise...

You sound like a Trumpy.

Get a series 65, open an RIA, and just sell directly to investors. Much easier and you have greater control of the experience.

Get margined. Don’t use your buying power, but margin makes options trading more accessible.

I like that you keep track of commodity prices and review them. Do you conduct breakeven analysis and track commodities fundamentals?

Analyst revisions are a driver of momentum and that information is very useful. Most firms will look at trends over past 4wks to 3 months.

Do you focus purely on commodities/metals?

I used risk arb as an example. Obviously, the easiest way to make money, if you have the right infrastructure, is quote stuffing and order filling. RenTech is more like Virtu/Citadel/etc. than an actual hedge fund in the classical sense (Soros, Bridgewater, Ackman, Icahn, etc.).