The holy grail has been found

[cmspruill]

There is so much misinformation in this thread it is baffling. For the record, over the next few years the markets will not "go flat" as a result... even if this type of software becomes more easily available to the masses - which I don't see happening anytime soon. Regardless, that's assuming ALL market participants use it to trade off, that is a far-fetched assumption. You still have large groups (buyers and sellers) that simply can't or won't use this type of software for one reason or another. Just cause it can answer questions like, "what happens when a hurricane hits Louisiana?" doesn't mean all arbitragable opportunities will cease -- which is a necessary condition for "flat markets."

I think it's a very cool idea, but it's no massive threat to hedge funds (RennTech, BW, etc.) or other big players in the market - trust me. Their strategies will continue working, the smart guys have adaptive systems... that's why they're masters at what they do.

 

[xelite777]

For the record, over the next few years the markets will not "go flat" as a result...

The Dow Jones more than doubled in price during the last 5 years alone, so the market is anything but flat!

 

[SouthbeachCTA]

If there is no participation, there is no emotion to speak of.

Emotions spark actions, which becomes participation, and it splits into winners and losers in the marketplace...

 

[xelite777]

Emotions spark actions, which becomes participation, and it splits into winners and losers in the marketplace...

Emotions need participants.

No participation (traders) no emotion.

If somehow a group of traders could artificially create a flat market with their own trading activities (via a trading algorithm of some kind for example), then they would discourage enough traders and soon the liquidity would simply dry up to almost zero, thus rendering their own trading business totally unprofitable.

So, again, it is not in their interest to engage in such practices.

 

[Tonkadad]

It's not even a question of emotion, if markets become flat for an extended period of time, nobody will trade them anymore and liquidity will dry up to almost zero.

And then who will take the other side of the trade? Think about it for a second.

Bottom line: it's not in their interest to render the market flat, assuming they have the power to do so.

If the markets are flat how do you make a killing with options.

 

[rightsized]

In flat markets you can make a killing selling options.

In fact, with options, you can make money no matter what the market is doing.

There will be no buyers of options.

 

[rightsized]

There is so much misinformation in this thread it is baffling. For the record, over the next few years the markets will not "go flat" as a result... even if this type of software becomes more easily available to the masses - which I don't see happening anytime soon. Regardless, that's assuming ALL market participants use it to trade off, that is a far-fetched assumption. You still have large groups (buyers and sellers) that simply can't or won't use this type of software for one reason or another. Just cause it can answer questions like, "what happens when a hurricane hits Louisiana?" doesn't mean all arbitragable opportunities will cease -- which is a necessary condition for "flat markets."

I think it's a very cool idea, but it's no massive threat to hedge funds (RennTech, BW, etc.) or other big players in the market - trust me. Their strategies will continue working, the smart guys have adaptive systems... that's why they're masters at what they do.

What do you think will happen when the code is cracked ? What's the end game when every possible move is anticipated and gamed?

 

[Sergio77]

its way beyond wolfram alpha--- the result of this technology SOON will be completely flat markets. years and years of flat markets-- way worse the than 1970's.

This is nothing more than a scanner. The claims are hilarious. Worden Brothers should be laughing. They are talking about finding which stock went up when a certain event happened. This is data mining, no value. Some stock will go up some stock will go down. Even if this happens 20 times or so as they claim it means nothing. They are wasting their time. Markets take every edge they are offered, cut it in small pieces and feed their dogs.

 

[xelite777]

If the markets are flat how do you make a killing with options.

You sell (write) out of the money put or calls options for example. Since the market is not moving (or moving just a little bit) the options you sold would expire worthless almost 100% of the time and you keep the premium.

 

[Tonkadad]

You sell (write) out of the money put or calls options for example. Since the market is not moving (or moving just a little bit) the options you sold would expire worthless almost 100% of the time and you keep the premium.

Isn't part of the value of the premium the volatility potential of underlying? How long are the option underwriters going to give away free money?