Trading very big money

[Rationalize]

yes
thats it

 

[cvds16]

Real estate even at the lowest level, an individual borrowing to purchase a home, is a levered
investment with low liquidity and expensive commissions.
Returns on initial margin or equity ar nothing to sneeze at.

that didn't quite work so well after 2008

 

[OddTrader]

Cash can be the biggest bet!

Alternatively, you can bet on the OTC markets with any structured products/ options contracts custom made for you!

https://en.wikipedia.org/wiki/The_Big_Short

The work follows people who believed the bubble was going to burst, like Meredith Whitney, who predicted the demise of Citigroup and Bear Stearns; Steve Eisman, an outspoken hedge fund manager; Greg Lippmann, a Deutsche Bank trader; Eugene Xu, a quantitative analyst who created the first CDO market by matching buyers and sellers; the founders of Cornwall Capital, who started a hedge fund in their garage with $110,000 and built it into $120 million when the market crashed; and Michael Burry, an ex-neurologist who created Scion Capital

The book also highlights some people involved in the biggest losses created by the market crash: like Merrill's $300 million mezzanine CDO manager Wing Chau; Howie Hubler, infamously known as the person who lost $9 billion in one trade, the largest single loss in history;[2] and Joseph Cassano's AIG Financial Products, which suffered over $99 billion in losses.

 

[oldnemesis]

Just so you know:

https://en.wikipedia.org/wiki/Volcker_Rule

Banks can't 'prop trade' any more. I haven't researched it but I don't think prop trading was ever a major source of income... in fact it was something of a Trojan horse that made the bank too vulnerable to extraordinary events. It's at conflict with the major functions of the bank. Prop trading mainly benefited the prop traders... who are now at hedge funds bankrupting them.

 

[newwurldmn]

Just so you know:

https://en.wikipedia.org/wiki/Volcker_Rule

Banks can't 'prop trade' any more. I haven't researched it but I don't think prop trading was ever a major source of income... in fact it was something of a Trojan horse that made the bank too vulnerable to extraordinary events. It's at conflict with the major functions of the bank. Prop trading mainly benefited the prop traders... who are now at hedge funds bankrupting them.

Most prop desks had a record year in 2008. In fact most trading desks did. Unfortunately it was offset by the mortgage desks. Of course, banks can't stop trading mortgages so the regulators went after prop trading. Why did the banks not fight it? It was a small price to pay. Proper prop trading has a very high ROE and ROC for the banks - but it's a small part of their pnl. It was a sacrificial lamb. Give up a 200MM business to keep a 2Bn business intact.

RE: the customer facilitation. There is a lot of prop that goes on - but it's not the primary source of income. The primary source of income is receiving commissions or spread and then protecting as much of that spread as possible. The prop is in conjunction with that - a customer sells a lot of delta to you and you are bullish. You might not sell all of the position out.

 

[El OchoCinco]

As I said....investment banks make most of their money from banking services...not directional trading...

 

[dealmaker]

Big money doesn't trade momentum they trade business cycles and they are spread across all asset classes eg when Joe & Jane Ordinary were dumping their real-estate assets 2008-09 billionaires were buying marquee assets and waiting for the next up cycle. One of the privileges of extreme wealth ( unless you were extremely levered like Aubrey Mcclendon was which is an exception) is the ability act when you want. Their emphasis is preservation of assets, growth is a by product of diligence, good and timely advice.

 

[diutinusfides]

How would you trade an account of size say $10 billion?
As we all know trading big money and making comparable profits like small money is not that easy.
So, what are the best classes of instruments to invest or trade that big money for making the most profit?

Let's say you run $5 billion. Until recently, it's become increasingly harder to fill adequate size even in the most liquid markets, e.g., EUR/USD giving 10-15pip spreads. Recently (past 12-18 months) that has come back down. Ultra liquid futures are also possible, e.g., CL. Large market cap equities. Can flip this book within 3-5 days comfortably.

 

[USDJPY]

How would you trade an account of size say $10 billion?
As we all know trading big money and making comparable profits like small money is not that easy.
So, what are the best classes of instruments to invest or trade that big money for making the most profit?

Buying a portfolio of stocks, hedging with stock index futures, and speculating on currency moves in the fx market. It's all in George Soros's first book.

 

[USDJPY]

Investment banks are businesses...Merrill Lynch and Goldman Sachs are not making their fortunes by trading, it is from commissions, transaction fees, market making, IPOs, financing, etc..

Warren Buffet is rich from owning businesses not trading stocks like a piker.

Real estate and owning a business is the true path to riches, especially if you are already rolling in millions.

You to understand where real wealth is derived from. No day trader is making millions of dollars on the reg. A billionaire is putting money in bonds and stocks as a means of investing or securing money already eared from daddy, real estate or business.

George Soros, Stan Druckenmiller, David Tepper and John Arnold would beg to differ. They did quite well from trading.