Search results

What if each stock goes down 25%? Investor: +13.5% Bank: -38.5% <- How to hedge this? Buy puts? Capped upside makes me think of vertical spreads

Yes. However, issuers are usually huge institutions whose business isn't scamming. These institutions must be able to deliver what they promise and they therefore need to cover their risks (plus comissions). How do they do it? In order words, if you were to build one of the above products...

Structured Products: How do they do it? Look at this one for example: https://derivative.credit-suisse.com/pdf/product/04/11760704/11760704_productflash_EN.pdf They pay 3-month US-Libor rates quaterly with a minimum of 2% and a maxmum of 5.5% Or this one...

Thank you. That's what I wanted to know.

Yes basically.

Alright, that might be it then. Why wouldn't it work with options though? You could somehow "buy" and "sell" VIX with the options.

The problem with IWM is the tracking error. I've just checked with IB: IWM 68.00 RUT 679.29 That's a big difference. I can't find the same dynamics in IWM and RUT. If think there is the same problem with TF. At least on historical data (from the same provider) TF and RUT don't match...

Hi, I want to trade RUT intraday. What are my options? The dynamics of RUT intraday work well for one of my strategies. I've investigated IWM but it doesn't seem to track RUT on an intra-day basis and I can't find the same dynamics as in RUT. The same goes for TF. I could try buying...

Yes, I suggested "price=100+rate" but "price=100-rate" also works for what I need. :)

Thank you!

Hi, Here's the interest rate for T bills (3months) for the past few months: 01/01/08 2.82 02/01/08 2.17 03/01/08 1.28 04/01/08 1.31 05/01/08 1.76 06/01/08 1.89 07/01/08 1.66 08/01/08 1.75 09/01/08 1.15 10/01/08 0.69 11/01/08 0.19 12/01/08 0.03 01/01/09 0.13 02/01/09 0.3...

Hello, Can you beat buy&hold on a yearly basis? By beating I mean improving returns, max DD, volatility and Sharpe with a minimal number of RT transactions (more than 4/year is a lot). So, can you do it? And if you can, please explain what kind of strategy you use (no details needed)...

It can be more than a year. For the listed suggestions, how does the additional risk scale with the additional profit? Is it a linear relationship?

Hi I know that for most people here such a low performance would be ridiculous. However there are already a lot of threads discussing how to turn 10k in 1M in less than a year. So, if you wanted to beat the risk free rate by a few percents, how would you do it? The goal, of course, is...

This is called curve-fitting.

Hi What would be a good trading strategy if the markets were gaussian?

I don't get this. By stable you mean stationary I guess? What do you mean with markets being truly gaussian? Normal distribution of daily returns? How do you position a strangle at 2 STD? Break-even points should be at current price +/- 2STD? I'm very interested in this, could anyone...

Alright, thanks. Then how could it be exploited, provided that the range is big enough?

Thank you! So if the market expects tomorrow's trading range to be X and my opinion is that the range will be (much) lower than X, by selling some vega I should be making a profit. Right? How can I compute X?

Hi, What's the impact of the daily trading range on option prices? Let's say that the underlying will trade tomorrow in a much narrower range than today, will I see a significant change in the option prices?