These are the variables I've played with to change the net profitability outcome.
- Realized P/L
- Unrealized P/L going into subject period
- HWM going into subject period
Karen at court
- Thread starter Pekelo
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These are the variables I've played with to change the net profitability outcome.
It's a simple logic: if the fund was profitable, why would she need to do all those tricks of rolling? Rolling is simply a way to hide losses.
And if still in doubt, just read the SEC complaint. It's all there.
And if still in doubt, just read the SEC complaint. It's all there.
Here are my questions to all you financial pros and accountants:
1. If she was trading stocks she did not have to "mark to market" her net position? Does that means in that case, no need for her to report unrealized losses?
2. For derivatives, as a hedge fund, was she required to "mark to market" her position at any reporting period?
3. If so, since she exclusively traded derivatives, should she report a net loss every month?
4. As an individual sir, you can create your own reporting system anyway you want as long as you are happy with it?
I love her story and always hope she was real, for the sake of us small mom and pop retail traders. I even tried her method myself, sadly it was just a case of too good to be true.
Regards,
It appears MTM is an election. But I'm Canadian, so what do I know?
https://www2.deloitte.com/content/d.../us-fsi-475-revocation-alert-final-040815.pdf
https://www2.deloitte.com/content/d.../us-fsi-475-revocation-alert-final-040815.pdf
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Another uninformed comment. For example, one could have a long/short straddle. After a move in the underlying you could either roll up or down the call or put if your objective is to neutralize delta. Both achieve the same change in Greeks but one would realize a gain while the other would realize a loss.
However, in practice I would usually roll the OTM option towards the underlying since the b/a spread of the vertical is typically narrower in this direction.
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No,no,no, please do it. I am bored and I would like to see your mental gymnastics....
You are desperately trying to stick to a losing position for no good reason, so yes, we want to see just what kind of deliberate logic you are using. Entertain us!
LOL. Pekelo--you're the last person that would understand it, but for the sake of others here is a possible scenario.
0 = time just prior to subject period
1 = time at end of subject period
P(r) = realized profit
P(u) = unrealized profit
NAV = net asset value
HWM = high water mark [remember--this is established based on the highest level of P(r), not P(r) + P(u)]
Here is what we know:
P(u,1) = -57
NAV(1) = 136
Fees(0 to 1) = 6, therefore at some time during period 0 to 1, HWM(t) = HWM(0) + 30
Here is what we don't know and are variable--changing these values change the outcome:
P(u,0) = 0 [a lower P(u,0) value requires a lower P(r,0 to 1) to make P(net,0 to 1) positive]
P(r,0 to 1) = 60, [the lower HWM(0) is, the less constrained P(r,0 to 1) is] therefore
P(net,0 to 1) = 60 - 57 = 3
NAV(0) = NAV(1) - 3 = 136 - 3 = 133 [We don't have info on deposits or withdrawals into the fund]
We also don't know HWM(0). There could have been a DD prior to t=0, but that doesn't mean the period from fund inception to t = 0 was not profitable.
I did this while feeding my 5-month old a bottle at 5 am so it might be foggy, but feel free to ask any questions.
Enjoy.
0 = time just prior to subject period
1 = time at end of subject period
P(r) = realized profit
P(u) = unrealized profit
NAV = net asset value
HWM = high water mark [remember--this is established based on the highest level of P(r), not P(r) + P(u)]
Here is what we know:
P(u,1) = -57
NAV(1) = 136
Fees(0 to 1) = 6, therefore at some time during period 0 to 1, HWM(t) = HWM(0) + 30
Here is what we don't know and are variable--changing these values change the outcome:
P(u,0) = 0 [a lower P(u,0) value requires a lower P(r,0 to 1) to make P(net,0 to 1) positive]
P(r,0 to 1) = 60, [the lower HWM(0) is, the less constrained P(r,0 to 1) is] therefore
P(net,0 to 1) = 60 - 57 = 3
NAV(0) = NAV(1) - 3 = 136 - 3 = 133 [We don't have info on deposits or withdrawals into the fund]
We also don't know HWM(0). There could have been a DD prior to t=0, but that doesn't mean the period from fund inception to t = 0 was not profitable.
I did this while feeding my 5-month old a bottle at 5 am so it might be foggy, but feel free to ask any questions.
Enjoy.
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The objective is to constrain P(r,0 to 1) to less than 57 given the above parameters so that P(net,0 to 1) < 0. I can't find the necessary constraints (ie. not enough info), therefore I get multiple solution sets with P(r,0 to 1) equal to or greater than 57.
Please let me know if you can find a way to constrain this variable.
Please let me know if you can find a way to constrain this variable.
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BS. I did 7 years in the Feds for $3.8M, and 85% was returned to investors. And that sentence was from a "liberal" Boston judge.
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