This thread is to collect information about tactics, techniques and procedures used at institutional trade desks. By studying the behavior of the big money players, we might better understand how they will move given similar market conditions. Please add what you know. Thank you.
Institutional Trader Tactics
- Thread starter GlobalRaider
- Start date
You mean trading dark pool in conjuction w/ trading OTC broker based product ? For example company wide massive long position in dark pool w/ various large insti's, whetehr stock or derivative structure then trader goes into small broker OTC shops and shorts the market, waits to assess liquidity and who is on the other side of trades etc; spreads rumor of how short he is, then starts buying back quickly feviourshily using calls and underlying when the braoder index is up, consequently buying more length in dark pool adding to nice gains in the overall position. I.E. asses liquidity and information over a smaller positions venues and utilizing "squawk box" positon, they dont call is a squawk box for nothing! Nice place to "spread" the word if you know what I mean..
How about being flat position with a pile of money waiting to go long/short then learning of a large speculator pain in some position say a futures spread in a farly large commodity, seeing the "luck" change in the market he proceeds to push very hard at the bad luck position while thousands of others do too at same time as information spreads, then said bad luck trader back breaks and begins full scale liquidation of his spread at very bad fills sunsequently a self fulfilling prophecy as he cannobolizes his own position in the liquidation, benefiting the the trader that was smart enough to be flat and push at the position?
All are risk positions as anyone can be wrong anytime, becasue anything can happen anytime, however a lot of these "institutional" traders are not follwing a "prospectus" plan etc; rather are doing nothing really speacial, they eventually all get hurt, its just about how bad they do, or how lucky they are when it goes against them, but point is it is still and information game for a "trader" while Einhorn and the rest, you know they deal activist investors etc; another different game....
How about being flat position with a pile of money waiting to go long/short then learning of a large speculator pain in some position say a futures spread in a farly large commodity, seeing the "luck" change in the market he proceeds to push very hard at the bad luck position while thousands of others do too at same time as information spreads, then said bad luck trader back breaks and begins full scale liquidation of his spread at very bad fills sunsequently a self fulfilling prophecy as he cannobolizes his own position in the liquidation, benefiting the the trader that was smart enough to be flat and push at the position?
All are risk positions as anyone can be wrong anytime, becasue anything can happen anytime, however a lot of these "institutional" traders are not follwing a "prospectus" plan etc; rather are doing nothing really speacial, they eventually all get hurt, its just about how bad they do, or how lucky they are when it goes against them, but point is it is still and information game for a "trader" while Einhorn and the rest, you know they deal activist investors etc; another different game....
Volcker rule.
In order to understand what they do you have to envision yourself having the money they have.
10's of millions for example.
1 They build positions, not readily buy and sell
2 Some wait for specific times of the year to trade seasonality
3 They have diversified positions they have teams scanning and scouring for movers in sectors and they rotate their money from one sector to the other
4 They are primarily trend following detectives not day traders
5 They network with each other in subtle ways, this unlike retail traders who are solo, a retail trader may go years repeating the same mistakes unaware of what they are doing wrong.
10's of millions for example.
1 They build positions, not readily buy and sell
2 Some wait for specific times of the year to trade seasonality
3 They have diversified positions they have teams scanning and scouring for movers in sectors and they rotate their money from one sector to the other
4 They are primarily trend following detectives not day traders
5 They network with each other in subtle ways, this unlike retail traders who are solo, a retail trader may go years repeating the same mistakes unaware of what they are doing wrong.
You will not have the information that they have which is their real edge.
Those are OP people money and it will be their least concern. The only thing they have to concern is they have accumulated enough saving from the big bonus and fat salary at that time (they will get fired) . I don't think retail trader have this luxury when they trade their own money.
Note most institutions traders are not behave like this, this is only small amount of people that have the gambler behavior that prefer short term gain and excitement. This is no different than in each corp that you will have small amount of people that prefer high risk game, such as trying to move up to the corporate ladder using high risk approach. They all gone eventually but they may already reap enough profit before they gone.
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This is true, but he asked about 'trading'. Portfolio management and hanging a pedigree on your office wall and beating the index once and a while another topic, cushy lifestyle