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When tomorrow every trader owns a computer with that kind of capability, probably the oevrall profit/ loss results for individual traders would be still about the same. Are we expecting today's losers would become winners tomorrow because of that? If yes, then there would be no any losers in...

LOL. :D

Plus almost zero returns.

Not only limiting risk, but also pumping up Share ratio. :cool:

I would be interested in the following one which has been already overdue for more than 12 months. Q Financial Trading Systems Design and Development with C++ (+CD) (Wiley Finance) (Paperback) by Gaurav Mangla Availability: This item has not yet been released. You may order it now and we...

Thanks for sharing with us about your experience. Good luck to you next round. :)

That's very true. If without any hedge, some potential risks could become adversely unmanageable.

Personally, I would put this part at a very high priority.

How about insurance premium?

How about this one: Q Organizations have traded calls and puts on hedge fund returns. UBS sold calls to the partners of LTCM and investd an amount equaling the notional amount in the fund as a hedge. Because they also reinvested the call premium in the fund, UBS actually invested more...

Probably a very good direction to find solutions, I would guess.

Now I believe the above type of issues would be exactly the real question I have had in mind about trading activities particularly regarding managing risks.

Q http://www2.sjsu.edu/faculty/watkins/ltcm.htm Some firms have found to their chagrin that they lost large amounts of money on fully hedged portfolio that were constructed to protect them against infinitesimal price fluctuations. Fully hedged portfolios are not risk free. Another chronic...

Why hedge funds would go broke? Q http://www.rgemonitor.com/blog/setser/129004 I thought hedge funds were supposed to be hedged ... against market downturns. Brad Setser | May 24, 2006 Wasn’t a key selling point of hedge funds that they could make money even when the (US) stock...

Many thanks to all of you for your excellent comments. It seems hedge mechanism can be useful mainly for small impacts. However, hedge would be not effective when facing major shocks. Am I right? Probably that would be why the big players equipped with the best hedge set-up could still suffer...

Thanks for the input. Perhaps I should wait for more comments coming, if any. PS: Basically I would interpret your answering Yes = Agree, and No = Disagree.

Yes or No:"Fully hedged portfolios are not risk free."? If yes, are there any conditions? If no, why not? Your comments are welcome.

"Put all your eggs in one basket, and watch that basket." --- Andrew Carnegie

Advanced Trading Rules, Second Edition (Quantitative Finance) by Emmanual Acar (Editor), Stephen Satchell (Editor) Applied Quantitative Methods for Trading and Investment (The Wiley Finance Series) by Christian L. Dunis (Editor), Jason Laws (Editor), Patrick Naïm (Editor) Market Models...

The above post illustrates a good example of circular logic! :D