The S&P 500 has topped at 2430 on 6/1/17

[tommcginnis]

Any second now, with all this "the retail..." and "yeah but institutions are...." crap, and somebody's going to write the Three Words That Should Never Be Together ("Online Trading Academy") and I'm going to just vomit right into my shoes.

 

[volente_00]

I have 2383-88 touch in play from 2438-42

Shorted 2439
Stop 2450

Objectives are

2420
2399
2389

Added
2442
2442.25
And 2442.5

 

[Pekelo]

Big swinging dick institutional traders have so much more breadth of intuition and creativity.

Before I jerk myself raw in awe of these traders, how come the HF industry can't even beat the market when all they have to do is hire these geniuses?

Bonus question, because I am also stupid: How does a perfectly hedged position make money? I never understood that. Hedging takes away the return too, not just the risk...

 

[noddyboy]

Added
2442
2442.25
And 2442.5

Do you ever run out of margin?

 

[bone]

Before I jerk myself raw in awe of these traders, how come the HF industry can't even beat the market when all they have to do is hire these geniuses?

Bonus question, because I am also stupid: How does a perfectly hedged position make money? I never understood that. Hedging takes away the return too, not just the risk...

Hedging does completely take away risk. A commercial hedge is another topic for another time. The purpose of a speculative hedge is to capture the divergence or convergence between highly correlated instruments whilst minimizing to the best extent practicable the delta directionality effects of the broad market.

There are better questions for you to ask. How does the Five Year Note outperform the Ten Year Note on a weighted hedged basis - irrespective to the movements of the broad interest rate complex ? How does Unleaded Gasoline outperform Crude Oil on a weighted hedged basis - irrespective of the fact that Crude rallies or sells off ? How does one stock name or a group of stock names outperform it's market sector or the broad index on a weighted hedged basis - irrespective of the broader market rallying or selling off ?

 

[srinir]

Lots of bold talk about these hedge fund and institutional investors, when their performance is dismal in the last decade.
Take a look at HFRI index in last 36 months. They can't even beat simple SPX. No wonder assets are flooding into index funds.

These returns does not even take into survivorship bias

 

[bone]

Before I jerk myself raw in awe of these traders, how come the HF industry can't even beat the market when all they have to do is hire these geniuses?

Well, the smaller hedge funds are by all published appearances performing much better than the large familiar funds, and they are on a multi-year trend of experiencing inflows. From what I can gather, the larger funds can't seem to retain talent, and they have really high overhead costs that pressure their fee structure.

In terms of HFRX, it's pretty obvious that there are quite a few different hedge fund strategies in play.

http://www.alphaq.world/2017/01/03/...ds-will-outperform-predicts-agecroft-partners

 

[Pekelo]

Hedging does completely take away risk.

Then why bring it up, specially with indeces? Not oil or bond, but indeces? Where is the delta or divergence in them? And if they are such a big swinging dicks, they should bet directional, hedging is for pussies...

 

[bone]

Then why bring it up, specially with indeces? Not oil or bond, but indeces? Where is the delta or divergence in them? And if they are such a big swinging dicks, they should bet directional, hedging is for pussies...

Tell you what, sporto. Call up any Chicago, London, or NYC futures prop firm principal and ask them who their biggest, most consistent producing traders are in terms of strategy. You can also do a search here on ET. The answer is pretty overwhelming.

 

[bone]

Ray Cahnman is a spread trader. Don Wilson is a spread trader. Those guys made hundreds of millions of dollars just spread trading - and built impressive trading firms along the way. I always thought that the purpose of trading was to make money, and not prove one's manhood.